By Mark Aoyagi
So do most people. But what are the effects of our aversion to loss?
Consider: professional golfers putt better for par than for birdie. In other words, when all variables are taken into account (e.g., length of putt, difficulty of green, etc.), a professional golfer is more likely to make a putt when going for par (i.e., trying to avoid a bogey, which is the same as taking a loss on the hole) than when going for birdie (when they can still miss and not lose par).
On the other hand, hating to lose can cause us to persist even when situations are against us. For example, a person who only wants to pursue victory will have a tendency to back off when victory is unlikely. A person who hates to lose will often put forth effort until the very end, regardless of the score.
There are many biological reasons for our hatred of losing (a single cockroach can ruin a bowl of cherries, but a cherry does nothing for a bowl of cockroaches), and it is relatively futile to try and fight this biological urge.
Thus, it is important to recognize how it can help us (serving as motivation when our situations look bleak) and hurt us (providing less focus and effort when seeking gain rather than avoiding loss). In financial considerations, loss aversion can make us avoid taking risks that are actually beneficial for us.
So, the next time you are faced with a decision or performance situation, take a moment and examine it from both a loss averse perspective (likely to be your natural reaction) and a seeking gain perspective (likely to require you to pause and use intention and effort). This won’t tell you what to do, but it will give you a better perspective on your options and provide an opportunity to make a choice more consistent with your values.
Source: The Performance of Your Life