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Willy is tragic because he has a tragic flaw. He has defined success in a rather narrow way, and he is miserable because of it. His interactions with the other characters influence whether he considers himself a success or a failure.
Every figure of success in Death of a Salesman is willing to take a risk or to work hard. Willy believes that there must be an easier way. Fundamentally, Willy is afraid to fail - he is afraid to take a risk or to be unconventional - and it is this fear of failure that could called his tragic flaw.
Now, this is a complex character in a complex drama, so there is more to Willy Loman than a fear of failure. There is also a deep need to gain the respect of others. Prestige and social position are obsessions which come up again and again over the course of the play.
Despite this need to be seen as "good", Willy's story is one of regret. It is a story of the things he did not do and the things he was afraid to admit if he did them. It is a story of weakness, moral weakness. The weakness, again, is born of a fear of being seen as a failure, as a "no good" or as a nobody.
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