A Very Mean (but Maybe Brilliant) Way to Pay Teachers
The Atlantic, July 24, 2012
One of the great, early insights from the field of behavioral economics was that when it comes to handling money, most people are driven much more by fear than they are by greed. The concept is called “loss aversion.” Faced with a financial choice — say, whether to sell a stock or hold onto it — the majority of us are more likely to worry about blundering away what we already have than get excited about the prospect of adding to our bank accounts. We simply feel the sting of losing a buck more strongly than we do the joy of making one.