Kahneman and Tversky concluded that losses were 2 1/2 times as undesirable as equivalent gains were desirable. In other words, a dollar loss is 2 1/2 times as painful as a dollar gain is pleasurable. People exhibit extreme loss aversion, even though a change of $100 of wealth would hardly be noticed for most people with substantial assets. We'll see later how loss aversion leads many investors to make costly mistakes.