Imagine you put on an old coat you haven’t worn in a while, and to your surprise you find a crumpled $20 bill in your pocket. How good does it feel? Do you go up half of a notch on a 1–10 mood scale—or maybe a full notch?

Let’s imagine a different scenario. Your grandmother calls to say she hopes you can use the $20 she sent with your birthday card, which you have since thrown away, along with the $20 that you somehow missed. What does that do to your mood on the 1–10 scale?

If you’re like most people, you feel a greater shift in mood losing $20 than gaining it. That tendency is called loss aversion, one of many cognitive biases. This is where the saying “fear of missing out” or FOMO, has its origins. Loss aversion is one of the most fundamental insights of a field of behavioral science called “prospect theory.”

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