Aggregation EffectOpen Access

Aggregation Effect

Negative experiences feel less painful overall when they’re bundled together

We have an increasing numbness to losses as they mount, so instead of spreading out small pains over time, overall we feel better when they’re consolidated.

Lim (2006). Do investors integrate losses and segregate gains? Mental accounting and investor trading decisions. The Journal of Business.

The study

Setup

Setup

425,744 sales of US shares were analyzed by determining which had gained value and which had lost value. Both groups were further analyzed to determine whether the shares were sold in groups or on their own.

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Results

Results

The research found that investors were more likely to sell off losing trades in groups over those which were doing well, so as to ease the pain of loss.

Study graph
np_read_2490885_000000

Lim (2006). Do investors integrate losses and segregate gains? Mental accounting and investor trading decisions. The Journal of Business.

Key Takeaways

1
1

Package the pain.

Releasing a whole bunch of bad news in one go is better than drip-feeding it across successive days. Similarly, having four fillings in one go is preferable to spreading them out one a week for a month. Less painful overall with fewer periods of worry. How you Frame pain matters too. Emphasize the short, one-off nature of the discomfort, the Fresh Start and comforting Certainty it will provide.

Takeaway image
2
2

Consolidate smaller losses into bigger gains. 

Even small bits of bad news can trigger overweighted negativity. Consider bundling them as part of larger, positive announcements to reduce the pain felt.

Takeaway image
3
3

Split off small gains from bigger losses.

What small victories can you hold back and share separately after a big bit of bad news? What small feature can you release separately from a significant security update?

Takeaway image
4
4
Takeaway image
Takeaway image
Aggregation Effect

Aggregation Effect

Negative experiences feel less painful overall when they’re bundled together

We have an increasing numbness to losses as they mount, so instead of spreading out small pains over time, overall we feel better when they’re consolidated.

The study

Setup

425,744 sales of US shares were analyzed by determining which had gained value and which had lost value. Both groups were further analyzed to determine whether the shares were sold in groups or on their own.

Results

The research found that investors were more likely to sell off losing trades in groups over those which were doing well, so as to ease the pain of loss.

study graph
np_read_2490885_000000

In detail

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Open access, foundational Nuggets

Scarcity

Scarcity

We value things more when they’re in limited supply

Social Proof

Social Proof

We copy the behaviors of others, especially in unfamiliar situations

Prospect Theory

Prospect Theory

A loss hurts more than an equal gain feels good

Reciprocity

Reciprocity

We’re hardwired to return kindness received

Framing

Framing

We make very different decisions based on how a fact is presented

Loss Aversion

Loss Aversion

We feel more negative when losing something than positive when we gain it

Default Effect

Default Effect

We tend to accept the option pre-chosen for us

Anchoring

Anchoring

What we see first affects our judgement of everything thereafter

Fast & Slow Thinking

Fast & Slow Thinking

We make knee-jerk spontaneous decisions that can cause regretful damage

Dynamic Norms

Dynamic Norms

We’re more likely to change if we can see a new behavior developing

Salience

Salience

Our choices are determined by the information we're shown

Connected to

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A loss hurts more than an equal gain feels good

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A loss hurts more than an equal gain feels good
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