Writings by Terry

The Power of Loss Aversion

Three months ago my brother told me about an experiment he read about in Nudge, a book on behavioral economics. The gist of it was that the threat of losing even a small thing to a cause you don’t benefit from, is a lot more motivating than the possibility of gaining something huge. The idea intrigued me a lot and I spent the next two days thinking about the implications of knowing this. I hit upon the idea that I should use this as motivation to do something I wouldn’t ordinarily be able to. I decided on doing at least 20 minutes of sitting meditation everyday for a month.

But what should I use as punishment if I didn’t hit my target? Doing nothing by half measure I figured that bigger was better and came up with the idea of giving $100 to my friend for every day that I missed would make this commitment extremely serious and practically guarantee I’ll make it (which was the point).

When I told my brother my plan he exclaimed that I missed the point of the study and that the money I put on the line was way too much. I shrugged and said that I was going to do it my way and I figured that this was going to work. I was right. I made the 30 days easily and continued on, only missing one day while on a trip of the last 100. The effects of doing daily meditation have been amazing, but I am going to leave that for another post.

Even though a $100 per missed session is pretty harsh I knew that this was achievable under threat but infinitely more difficult out of sheer “will power”. Of course if a natural or family disaster had hit I would’ve excused myself for not meeting my commitments for the day, this was not about seeing how strict I could be, but to make sure I avoided the temptation of simply wimping out. So unforeseen circumstance notwithstanding, I was forced to complete my daily goal.

My point is this: the benefits of daily meditation, of which there are many, were not enough to get me to be as consistent as I’ve always hoped. However I hate the idea of giving away already earned money so much that I could use it as leverage in order to achieve this difficult goal. I already mentioned that I have continued my mediation practice even though I don’t have to, and now I am starting to look around at what else I can get myself to do that I have been putting off. And I came up with empire building, aka stacking the bricks, for 20 minutes everyday.

I am always pushing myself to do new things and I am going to use loss aversion to my advantage to create new good habits. One of my goals has always been to learn a second language, so I am going to set some small punishments if I do not make my milestones for studying German.

FREE BOOK NOTICE

PS Nudge is an awesome book, and since it’s Christmas and all, I will send the first person who wants to do a similar Loss Aversion powered 30-day challenge, and even better if you’re willing to share a few sentences on the outcome via dopezart or your own blog

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