“Don’t it always seem to go
That you don’t know what you’ve got
Till it’s gone” –Joni Mitchell, Big Yellow Taxi
My husband “loaned” my unused iPad to my father-in-law. I hadn’t used it in a year. He thought since it might expand his dad’s horizons and bring the Internet to him for the first time. But my father-in-law didn’t use the iPad either. Upon finding it stashed in a drawer with its power drained (after a couple of months), I demanded it back.
I proceeded to load it with some New Yorkers to read on a trip.
It was great…for a very short while.
But this past week I read a physical New Yorker instead of its e cousin. There was something extremely satisfying about shuffling and folding its pages. Sure, I can listen to poets read their poems and enjoy the extra photos on my iPad. But the video clips? Not that interesting.
My iPad remains underutilized. And I am feeling a bit guilty about asking for it back. Why did I want it back? Why did I react so strongly to “losing” my unused iPad?
Daniel Kahneman, in Thinking Fast and Slow, gives insights into how we react to perceived gains and losses. We respond to a loss far more strongly than we do to an equivalent gain. Take something away and we’ll pine for it even more than its perceived value. And we are driven more strongly to avoid losses than to achieve gains. No, that isn’t rational. But it’s how we are wired.
Sigh. So chalk up my reaction to my loaned iPad to petty possessiveness and an ingrained reaction to perceived loss.
Even more distressing, Kahneman points out that we take on extra risks when faced with a loss. We continue to press on in spite of mounting losses. Losing gamblers keep gambling. Homeowners are reluctant to sell a house that is underwater in value and move on. And additional time and resources get allocated to late, troubled software projects with little or no hope for success. It’s easier than deciding to pull the plug.
Not surprisingly, our aversion to loss increases as the stakes increase. But not dramatically. Only when things get really, really bad do we finally do pull back and stop taking avoidable risks. And to top that off, loaded, emotional words heighten our perception of risk (conjuring up scary imaginary risks that we then don’t react to rationally).
So knowing these things, how can I become a better decision-maker? Right now, I don’t see any easy fixes. Awareness is a first positive step. When I feel a pang of loss I’m going to try to dig deeper to see whether I need to shift my perspective (which might be hard to do in the heat of the moment, but nonetheless…). Especially when I suddenly become aware of a loss. Knowing about loaded, emotional words, I’m going to be sensitive to any emotional “negative talk” that could distort my perceptions of actual risks.
Still, I’m searching for more concrete actions to take that can help me react more rationally to perceived losses. Is this a hopeless cause? I’m interested in your thoughts.