Operating Principle

2–4 min read

Price Increases Are Felt Longer Than Decreases Are Enjoyed

Price Increases Are Felt Longer Than Decreases Are Enjoyed

Price Increases Are Felt Longer Than Decreases Are Enjoyed

Customers resent increases longer than they enjoy equivalent decreases.

Customers resent increases longer than they enjoy equivalent decreases.

Customers resent increases longer than they enjoy equivalent decreases.

Loss aversion makes price changes asymmetric and demands deliberate communication.

Loss aversion makes price changes asymmetric and demands deliberate communication.

Loss aversion makes price changes asymmetric and demands deliberate communication.

Loss aversion makes price changes asymmetric and demands deliberate communication.

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Operating Question

What reference price, alternative, or comparison context is shaping this decision?

What reference price, alternative, or comparison context is shaping this decision?

What reference price, alternative, or comparison context is shaping this decision?

Why It Matters

Loss aversion makes price changes asymmetric and demands deliberate communication.

Supporting Evidence

Kahneman and Tversky; Kalyanaram and Winer.

Research Notes

Test pricing changes in the actual category and customer context before generalizing the mechanism.

Practical Actions

Communicate clearly; give notice; do not expect later cuts to erase resentment.

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