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Loss aversion may not lead to net gains in behaviour

It can be a powerful corrective, but can also foster a “What’s in it for me?” attitude

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Most schools I know have a sensible policy on mobile phones. Because of their size, most primaries and special schools require phones to be handed in during the day. Most secondary schools have a policy that phones are only seen with the express permission of staff. To do otherwise results in its confiscation for a short period of time.

This policy is a good example of the use of loss aversion – the idea that losses generally have a much larger psychological impact than rewards or gains of a similar value – as a deterrent.

We need to be clear that loss aversion is different to a general ...

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