Loss Aversion Bias

1222 Views

Between the joy of picking one hundred-dollar bill on the road and the agony of losing it, which emotion do you think is bigger?

People usually choose the latter one. This is because they feel the agony of losing more than the joy of getting the same amount of money. This psychological phenomenon, which is more sensitive to loss than profit, is called “Loss Aversion Bias.”

The same is true in golf; the agony of a bogey [taking one stroke more than what is expected] outweighs the thrill of a birdie [sinking a ball in one stroke less than the number of expected strokes]. This makes golfers have fear of failure and discourages them to give it a new try. If they challenge, they may do better, but they come to miss the opportunity by playing conservatively.

The way to make rational choices against loss aversion bias is to identify the cause and challenge again, rather than to focus on failure itself. Failure then becomes the foundation of success.