Loss aversion is a concept of Social Psychology as much as economics. It is not the reality of loss that matters but the perception. Nations have gone to war until their doom because of loss aversion. It simply means you refuse to admit you made a mistake. Social Psychology Fourth Edition, Aronson et al., p. 175: "Once we have committed a lot of time or energy to a cause, it is nearly impossible to convince us that it is unworthy" The real question is "How bad do your losses have to be before you change course?" In stocks this is called capitulation