Myopic loss aversion

Biological Parallel

Predators monitoring prey populations daily see wild fluctuations—a missed hunt, a competitor's kill, weather disruptions—and might abandon viable territories. Those assessing over seasonal timescales see actual trends. Frequent evaluation exposes normal variance that triggers false alarms. Myopic loss aversion works identically: checking portfolios daily reveals volatility that annual assessment would smooth away, but our loss aversion system treats each dip as a threat, triggering disproportionate emotional response and flight behavior.