Loss Aversion and the Importance of Changing Your Lens

Loss Aversion and the Importance of Changing Your Lens

There is a concept called Loss Aversion that suggests that we hate losing exactly twice as much as we love winning.  That concept drives our behaviour in predictable ways and is a key driver for our aversion to failure in our work.  For that same reason I think it is twice as important to focus on areas of challenge with the right lens in order to accept our failures early and maximize our potential for success long term. In the late 1970's there was a study done by psychologists Daniel Kahneman and Amos Tversky that demonstrates the loss aversion phenomenon. In the first experiment they asked students to choose between two bets: a bet with 100% chance of winning $3,000 a bet  with an 80% chance of winning $4,000 and a 20% chance of winning nothing In this experiment they found that 80% of the students would choose the $3,000 bet even though the second bet had a higher expected payoff.  (Bet 1 expected payoff...
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