What is the loss aversion effect in UX design?

The loss aversion effect is a type of cognitive bias often used in user experienceUX design and marketing. Therefore, economists tend to reference it more than psychologists do. The loss aversion effect refers to people’s dislike and avoidance of losing being of more importance to them than winning something.

The loss aversion effect has a significant impact on UX design and is thus taken into consideration by designers while designing interfaces. For example, when giving feedback or other messages, these features have to be presented so that the users are not negatively impacted.

Kahneman and Tversky arranged a series of experiments that showed “people tend to fear a loss twice as much as they are likely to welcome an equivalent gain.” As shown in the figure, there is a greater impact of losses than gains if the change in the absolute value is the same.

A possible application of this is when giving discount offers or lucky draw ads. The ads should be worded to tell the users what they will lose if they do not take advantage of the offer.

The loss aversion effect has the following uses:

• when a decision has to be framed as either gain or loss.
• when the aim is to motivate the user to continue on a website or task.
• when the aim is to motivate the user to start on a website or task.