Loss Aversion and Chinese Flowers

We have had 80 (27) degree weather here for the last four days and various shrubs and trees have got the message. There are flowers all over campus. I don’t remember seeing as many spectacular flowers anywhere else. On the other hand, I feel a bit like Lin Daiyu, a character from the Chinese classic novel Dream of the Red Chamber. She spends her Springs burying the petals from fallen flowers. Famously she sings this song (I’m skipping the hard parts…this was written in the 18th century and I can’t be bothered to look up the hard words at the moment):

Flowers wilt, flowers fall, flowers fill the sky. The reds disappear, the fragrance is cut short, and yet no one mourns. The girl from the mansion grieves over the Spring grave, sadness fills her heart with no reprieve. She leaves her chamber with a flowering spade, and has to endure trampling the fallen petals coming and going. While we can expect the pears and plums again next year, who knows next year who the mansion will hold. In the 360 days of the year, the knives of wind and swords of frost press on. How long can beauty last? One morning the wind blows and it’s never found again…

What we see here is typical loss aversion. It’s better to have flowers than not, but once you have them, it seems worse to lose them than never having had them at all. I felt that way today seeing all the beautiful flowers. On Wednesday we are supposed to get thunderstorms, and then they will all be gone.

The more I reflect, the more I realize that I (and I assume other people) are loss averse. I am much more worried about losing 20 dollars than I am about gaining 20 dollars for instance. Another possibly more personal example is that I am more worried about disappointing people who have a high opinion of me than impressing people who think I am mediocre.

Who would have thought I would have so much in common with a sensitive rich girl from 18th century China.

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