What possible error in judgment can come about by the misapplication of the Loss and Risk Aversion Heuristic?

Loss and Risk Aversion Heuristic

A cognitive bias where people prefer to avoid losses rather than acquiring equivalent gains, indicating a greater sensitivity to losses over gains.

Error

A mistake or inaccuracy, often due to oversight or misunderstanding, which can affect outcomes or validity.

Judgment

The faculty to formulate thoughtful decisions or derive sound conclusions.