5 for 5 blog – Making new change stick (part 2) – Loss aversion

19 Jan

2015-01-18 22.13.41

 

Good morning everyone.

Please consider the following two problems:

  • Problem 1: Which do you choose?
  • Get $900 for sure OR a 90% chance to get $1,000

 

  • Problem 2: Which do you choose?
  • Lose $900 for sure or 90% chance to lose $1,000

 

This quiz is taken from the book, “Thinking Fast and Slow” by Daniel Kahneman, another book that I had a chance to read over the holidays. If you are like most people in problem one you likely chose the sure thing, to take the $900. However, given problem 2, most people in Kahneman’s study chose to take the risk. His theory is this….problem 1 is a mixed gample, where a gain and a loss are possible…in this situation people become very Loss Averse. The idea is that “losses loom larger than gains” (pg. 284). In the second problem, where people are deciding between losses, the sure loss is very aversive pushing you to take the risk.

Reading this, literally right on New Year’s eve, was interesting to me. I began thinking of making the decision to pursue a new change (resolution). If we think of the sure things as the status quo, in other words, doing nothing, not changing. Then is it possible that if we set our goals in change as something to gain that this is why it is easy for us to default (as in problem 1) to the sure thing…falling back to the status quo of eating bad or hitting the snooze button?

Even more fascinating, although I would admit not “upbeat and positive” as the first problem, is the prospect of do we understand the potential for loss by choosing the status quo. It brought back to me a quote I have heard many times before:

“People will not change until the pain of staying the same is greater than the pain for changing.”

To me, this is exactly what problem 2 is describing. We don’t consider the real losses when setting out on our changes which make it comfortable to break resolutions a few weeks into the new year. But if we really consider the losses….sure we think the small actions today might not have any influence, but if we truly used the idea of loss aversion, perhaps that could be one of the best catalysts yet to staying with our changes and converting them into habits!

Here’s hoping you are still hanging tough with your changes. If not it may be worth looking at those two gambles above again and ask yourself, what you are really pursuing.

Here’s this week’s 5 for 5:

Why You Shouldn’t Try To Make This Your Best Year Yet – by Helen Williams – via the Holstee blog

https://www.holstee.com/blogs/mindful-matter-2015-01/16331740-why-you-shouldnt-try-to-make-this-your-best-year-yet

SO WHAT: A beautiful piece that challenges us to become more of who we are and learning to be content.

Tags: Resolutions, change

 

Forget Resolutions, What’s Your “Beautiful Question” For 2015? – by Warren Berger – via Fast Company

http://www.fastcodesign.com/3040821/forget-resolutions-whats-your-beautiful-question-for-2015

SO WHAT: Interesting idea to frame your desired change as a question.

Tags: Resolutions, change

 

Infographic: Your 3-Step Solution To Making Better New Year’s Resolutions – by Jillian Wong – via Design Taxi

http://designtaxi.com/news/371512/Infographic-Your-3-Step-Solution-To-Making-Better-New-Year-s-Resolutions/

SO WHAT: For those out there who are more visual, a brief infographic with three ideas for your resolutions

Tags: Resolutions, change

 

4 Reasons Why You’ve Already Broken Your Resolutions – by Lisa Evans – via Fast Company

http://www.fastcompany.com/3040360/4-ways-to-make-more-effective-resolutions?utm_source

SO WHAT: The idea of believing you will fail is a very interesting one.

Tags: Resolution, change

 

How To Budget Next Year’s 2,000 Working Hours – by Laura Vanderkam – via Fast Company

http://www.fastcompany.com/3040276/how-to-budget-next-years-2000-working-hours?utm_source

SO WHAT: Create a time budget <- very interesting

Tags: Resolutions, change

 

All the best, kevin