Is too much tennis barely enough? I have been pigging out on the Australian Open over the last couple of weeks, watching elite sportspeople do battle, pitting their physical and mental strength against that of their opponents. What stuck me was how the fear of losing can be more powerful than the will to win; and that's exactly the trap most businesses fall into. Choking. When you play defensively waiting for someone else to make a mistake rather than taking the shot. When you are the dominant player and don't change your business model in response to changed market conditions, unravelling as competitors come in and steal your ground. I'm thinking of you Kodak, Yellow Pages, Nokia, Microsoft, Borders... So let's dig into why and how you can overcome this paralysis.
Fear of losing
Loss aversion is the behavioural principle that I have mentioned most often in my blog articles because I believe it is one of the keys to unlocking an understanding human behaviour. Our tendency to avoid loss rather than seek gain is one of the strongest, most primal responses that influences the actions we take because frankly, it seems safer. It's a "Better the Devil You Know" approach. Chasing the win requires stretching into the unknown and that can be uncomfortable whereas structuring your business to hold on to what you have - circling the wagons - is much more familiar. From small businesses to boardrooms at the big end of town, introducing price rises rather than launching new products, prioritising higher margin but end of life products rather than lower margin growth products, slavishly applying traditional marketing techniques in a new digital world, and staying with incumbent suppliers who disappoint rather than trying someone new are examples where loss aversion may have reared its head.
Overcoming loss aversion
So how can you get over this mental barrier?
Last year I read Timothy Ferris' book "The 4-Hour Work Week". Ferris' aspirational lifestyle aside, what I found really useful about the book were the processes to overcome fear of taking the leap to a new style of career. In other words, tips for overcoming loss aversion.
Whilst written from a career change perspective, this process can be used to overcome business fear too.
1. Define your worst nightmare
2. What steps could you take to repair the damage?
3. What are the benefits of more probable scenarios?
4. If it happened today, what would you do it get things under financial control?
5. What are you putting off out of fear
6. What is postponing action costing you financially, emotionally and physically?
7. What are you waiting for?
Another technique I have used, based on Ian Stephens' 7 Step Pathway to Mastery, is to write down;
1. what you want your future state to look like
2. 25 Benefits to you/your business of achieving this future state
3. what this means for your priorities. Then;
4. 25 disadvantages of of not moving to the future state, and
5. What these disadvantages will mean in 5-10 years (which amplifies the downside of inaction).
And finally;
6. What the benefits will mean in 5-10 years and
7. The steps to which you will commit to achieve your future state.
At their core, both Tim and Ian's methods amplify the negative impacts of loss aversion (by doing nothing or doing the same) to such an extent that it is much less palatable than the benefits of taking action. And that is the key to conquering loss aversion. We are all familiar with listing the pros and cons of taking a course of action, but loss aversion teaches us we need to get more familiar with the cons of inaction if we want to be someone who steps up and takes the shot. Happy conquering.
Image from blogs.abc.net.au
Tuesday, January 31, 2012
Friday, January 27, 2012
Behavioural Economics Twitter wrap-up (21-27 Jan 2012)
Behavioural and Behavioral Economics tweets
Sat 21 Jan-Fri 27 Jan 2012
This post contains a summary of tweets noted in the past week that mentioned behavioural/behavioral economics. Where possible, re-tweets have and tweets without links been removed to condense the list.
The summary is posted weekly by People Patterns.
Congratulations to @TimHarford for his much shared "The behavioural economics of house prices: bit.ly/xNwsg8 (Or - why have they stayed so high?)" and Jeff DeChambeau for his post last week on Facebook conspiracy theories that was popular again this week.
PS Slight formatting change to the post this week I'm afraid. Form may not live up to function!
Tweets with Behavioural Economics mentioned (UK spelling)
morrisdave dave morris
My first feature for @robmagazineca is on behavioural economics. Nerd out with me: ow.ly/8HTvk
TimHarford Tim Harford
The behavioural economics of house prices: bit.ly/xNwsg8 (Or - why have they stayed so high?)
erikalwatson Erika Watson
Thx @hsnorwich inspirational event: @webheroines behaviouraleconomics, sketchup, NFC.. Whoknew Norwich had so much creative digital talent
jlievens jean lievens
Great Presentation: Behavioural Economics / Finance | @scoopitvia @chrishoeller bit.ly/wtDFMr
chrishoeller Chris Hoeller
I just picked the pearltree Behavioural Economics / Finance by@Pedaviet pear.ly/Pq8T
LittleMissHeals Emma Healey
Had a brilliant talk by @BrainJuicer today. Really got us thinking about behavioural economics. Brain is buzzing...
27 Jan
adam_batsford Adam Batsford
@
@hockeymonkey15 I've got a choice of 3, behavioural, international or applied economics at Nottingham university. You not tempted?
27 Jan
CatPBishop Catharina Bishop
Just heard Brain Juicer talk about behavioural economics: 'we think much less than we think we think'. Thought provoking stuff!
27 Jan
assessworks AssessWorks
South African tech company launches decision analysis application that uses the insight's of behaviouraleconomics....http://bit.ly/yS5Xov
27 Jan
ITWebDigital ITWeb Digital
22seven goes live cot.ag/Ac2Oab A local start-up aims to use gamification & behavioural economics to help users manage their finances
heidibeeee Heidi Brauer
Game design, psychology of play and behavioural economics - beautiful thinking ingredients that went into creating #22seven. 22seven.com
27 Jan
Toyahara Toyohara
Reading Kahneman & Tversky Origin of Behavioural Economicson Scribd scr.bi/yibExT #readcast
27 Jan
Jaimeaybq Jaime Loftin
Bounded Rationality and Public Policy: A Perspective fromBehavioural Economics book downloads: Bounded Rational...bit.ly/y4TenE
27 Jan
EconCrunch Econ Crunch
The economist as therapist: Behavioural economics and “light” paternalism by George Loewenstein: econcrunch.com/2012/01/the-ec…
FrontierEcon Frontier Economics
Do you think customers are irrational? Financial watchdog comments on behavioural economics bit.ly/yXBu7I
bigtalkingshop Paul Roberts
An interesting case study for behavioural economics: Could Tesco kill Clubcard? bit.ly/xwVgoA #marketresearch
tlonuqbar Mark Rogers
The march of behavioural economics. UK watchdog says will protect ‘irrational’ investors on.ft.com/ygcgzB (requires sub)
jatinderdhami jatinderdhami
Are we seeing the start of behavioural economics into regulation?ft.com/cms/s/0/7a681c… #FT
Guy_He Guy Hearn
Nike Unveils FuelBand for Tracking All Physical Activitymashable.com/2012/01/19/nik… via @mashable great behaviouraleconomics in action idea
grbeaton George Beaton
Following my tweet on business.time.com/2012/01/19/eco…, I recommend A1 list of readings on behavioural economicsfarnamstreetblog.com/2010/04/behavi…
TimHarford Tim Harford
The behavioural economics of house prices: bit.ly/xNwsg8 (Or - why have they stayed so high?)
ACatNamedFelix Danny Gray
You can write about anything, except cognitive biases andbehavioural economics, that's my shtick.theleafsnation.com/2012/1/24/fres…
ingridk Ingrid Koehler
Surely the answer is surcharge and not deductiongu.com/p/35x9f/tw via @guardian Simple behavioural economics.
pririn_ 真葛原雪 Yuki Makuzuhara
何言ってるのか聞き取れないや Prof. David Levine - IsBehavioural Economics Doomed? youtu.be/vhBfk8HgJj8
Ogminn Ogminn
How will behavioural economics change research? | Features | Research: bit.ly/fX27cf via @AddThis
SmartCompany SmartCompany
Converting browsers to buyers: Lessons from a food charitybit.ly/yTl5CE
Claire_McA_ Claire McAlpine
As researchers and strategists, does learning about behaviouraleconomics change the way we think? tmblr.co/Za_PNyFEiFcL
afxnet AFX Net
Interesting: @BrandRepublic Forget Behavioural Economic#s, now#it& ;s Ergopsychonomics says Chris Arnold bit.ly/AdlxL8
PDoortman Paul OORTMAN GERLING
Behavioural economics is fascinating! Watch Sheena Iyengar: How to make choosing easier #TED on.ted.com/AF96
»pulistbook pulist books
pulist.net/choice-behavio… #behavioural #economics #substance #abuse Choice, Behavioural Economics and Addiction
JGMcClellan Jon McClellan
Great example of the Paradox of Choice - Acient Japanese Battle offers insight into Behavioural Economics wp.me/p1yU25-8u #in
JaideMustafa JaideMustafa
Reading 61 pages on the intro to behavioural economics is not going down well...
TimHarford Tim Harford
The behavioural economics of house prices: bit.ly/xNwsg8 (Or - why have they stayed so high?)
econfix Mark Johnston
Behavioural Economics: dissatisfaction of limitless choice.wp.me/pZ5TJ-1Hw
afxnet AFX Net
Cool: @BrandRepublic Forget Behavioural Economic#s, now #it& ;s Ergopsychonomics. Chris Arnold explains. bit.ly/AdlxL8
taraebroad Tara Broad
interesting blog, particularly to me, as someone who has difficulty making decisions- JAPANESE BEHAVIOURAL ECONOMICS:bit.ly/x9KzNF
TrevorBlum Trevor Blum
Seven principals of #behaviouraleconomics:neweconomics.org/publications/b… #econ
Paul_Ray Paul Ray
If you like a little bit of behavioural economics, but aren't keen on the plum that is Rory Sutherland, check thisthebestbehaviour.wordpress.com
barrackballack Ashleeh
An interesting article about Facebook timeline and behaviouraleconomics | jeffdechambeau.com/friending-fast…
KoehlerBear Brad Koehler
RT @Foolproofer Hot Source 5.30 at NUCA Duke St next Thurs. Talks about behavioural economics, Sketchup & Web Heroinesgoo.gl/bnaXI
Foolproofer Tom Wood
Don't forget. Hot Source 5.30 at NUCA Duke St next Thurs. Talks about behavioural economics, Sketchup & Web Heroinesgoo.gl/bnaXI
mossrowe Moss Rowe
@zoestonee Just been learning about behavioural economicssmiley faces on receipts nudge people to give larger tips #penhaletricksters
in_context Rebecca Roderick
Behavioural economics and the importance of context - 3Sixty Internet Ltd 3sixty.co.uk/our-thinking/b… via @3sixtyagency
stewssr Stewart Rand
Good read. Love Cracked RT @MikePMoffatt: Surprisingly good piece on behavioural economics. From Cracked! (seriously)bit.ly/yy3a3J
MikePMoffatt Mike Moffatt
Surprisingly good piece on behavioural economics. From Cracked! (seriously) cracked.com/blog/the-5-stu…
21 Jan »
OptimisaRich Richard Fincham
Online qual and behavioural economics webinar today...www3.gotomeeting.com/register/53730…
Tweets with Behavioral Economics mentioned (US spelling)
INOMICS INOMICS
INOMICS announces a conference: Research Workshop inBehavioral Economics: on August 29, 2012 in Mainz, Germanybit.ly/xiwBjG
EconomistYasir Yasir Mazumder
Re-watching Prof @danariely video on behavioral economics.youtube.com/watch?v=9X68dm… It is so fascinating, cant wait to read his book.
ABuschmeier Andreas Buschmeier
via @davdittrich: Behavioral Economics&Rationality:What's the status of neoclassical rationality asa normative standardow.ly/8Grf1
Sherrellutx Sherrell Haubrich
Behavioral Economics: Politics, Law & Business: Learn aboutBehavioral Economics with iMinds insightful knowledg...amzn.to/pFOeDj
s6t2e5f Stephanie Wang
behavioral economics -> behavioral pricing. the success of this is a very fine line. bit.ly/wtj7HR what do you think?
maryfeldman mary feldman
Beyond Rational Thinking: Using Behavioral Economics to Improve Workforce Health and Organizational Outcomes:bit.ly/u68chp
anandrajaram Anand Rajaram
Interesting "reverse" strategy on behavioral economics. Wonder how this will pan out lnkd.in/5YFHqr
inobrec Alessandro Cerboni
Rationality and choices in economics: behavioral and evolutionary approaches - Munich Personal RePEc fb.me/1kb5EQbhd
inobrec Alessandro Cerboni
Rationality and choices in economics: behavioral and evolutionary approaches - Munich Personal RePEc Archive | @scoopitbit.ly/ytu8pe
alexfiorillo Alexandra Fiorillo
Behavioral economics in South Africa. Sounds like a Mint type of program for people to improve budgeting. bit.ly/wwpf19
INOMICS INOMICS
INOMICS announces a course: Research Workshop and Summer School in Behavioral Economics: Application Deadline: A...bit.ly/yj4hZn
graciainglessis maria g inglessis
what does Meg Ryan (or the lady sitting next to her in a restaurant) have to do with behavioral economics?wired.co.uk/magazine/archi…
ricardomexcan RICARDO
The Darwin Economy | @scoopit bit.ly/yV1DIi
inobrec Alessandro Cerboni
Behavioral economics -- an overview - a knol by Thomas Sulcer | Bounded Rationality and Beyond fb.me/LtLa32xh
Ogminn Ogminn
Justmoney Team Justmoney
Christo Davel telling the attendees at the #22seven some interesting stuff about behavioral economics. twitpic.com/8btk5i
Aartjan Aartjan van Erkel
Tip obv behavioral economics RT @EricaVerdegaal: Op zoek naar eerlijke financieel adviseur? Laat erecode ondertekenenericaverdegaal.nl/publications/i…
Stonewerks joshua strauser
Why Smart People Make Big Money Mistakes And How To Correct Them: Lessons From The New Science Of Behavioral Economicsamazon.com/gp/aw/d/068485
lilymaggi Lily Ma
Behavioral Economics and Rationality « ThinkMarkets: Most amazingly, behavioral economists tend to accept the no...bit.ly/xBglqW
pageforbooks pageforbooks
Eating Behavior and Obesity: Behavioral Economics Strategies for Health Professionals health.pageforbooks.com/eating-behavio…...
isomorphisms Lao Tzu
@
@aClassicLiberal You've pushed 1of my buttons. Neuromarketingthinkmarkets.wordpress.com/2012/01/25/beh… @leighblue@UnlearningEcon @moiracathleen @EllieAsksWhy
aClassicLiberal Old Whig
What is the status of neoclassical rationality as a normative standard? ow.ly/8Grf1 @leighblue @UnlearningEcon@isomorphisms
xckenma Brian Velasquez
Inefficient Markets: An Introduction to Behavioral Finance (Clarendon Lectures in Economics) 8211 Andrei Shleifer d..tinyurl.com/6lu
Nonicoc Niclas Berggren
Kurs i beteendeekonomi på NYU. wp.me/pmseG-1kP
davdittrich Dennis A V Dittrich
Behavioral Economics and Rationality: What is the status of neoclassical rationality as a normative standard? ow.ly/8Grf1
drumming Paul Schmidt
Dan Ariely Announcing Third Book bit.ly/zDsHnU via @danariely <--Amazing author on behavioral economics. Check him out!
mrahman4 Moin Rahman
Behavioral Economics: "The Price of your Soul"rstb.royalsocietypublishing.org/content/367/15…
hkd1frutf Bradley Bowden
Advances in Behavioral Economics (The Roundtable Series inBehavioral Economics) 8211 Colin F. Camerer George Loewe..is.gd/Iao7dY
AVAinstituutti AVA-instituutti
Deep Rationality. Evolutionary Psychology Meets BehavioralEconomics. psychologytoday.com/blog/sex-murde…
OrganicEcon Organic Econ
Kahneman’s Time Interview Fails to Allay Concerns AboutBehavioral Law and Economics om.ly/BktKD
raoulbeck Raoul Beck
Watchdog to protect ‘irrational’ investors (behavioral economics) -FT.com - UK Politics & Policy ft.com/cms/s/0/7a681c…
Axel_Nico Axel Nico
なぜゲーミフィケーションは効果的なのか?hiromikubota.tumblr.com/post/792179177… <そこには行動経済学(behavioral economics)との関連性の深い“人間の感情や習性”を巧みに利用したゲームのメカニズムがあるのです> これが適用されていればどの例もOKなのかな。
TheIntuitInvest Jason A. Voss, CFA
A victory for behavioral economics: UK watchdog to protect ‘irrational’ investors - FT on.ft.com/ygcgzB
Mihaela_Canja Mihaela Canja
Daniel Kahneman on behavioral economics lnkd.in/SEmyWs
「そこには行動経済学(behavioral economics)との関連性の深い“人間の感情や習性”を巧みに利用したゲームのメカニズムがあるのです。」 / “なぜゲーミフィケーションは効果的なのか?(Why Gamification …” htn.to/znp4Mu
Daniel Kahneman is psychologist whose work spans cognitive psychology, behavioral economics, and well-being.youtube.com/watch?v=f7cECa…
Eusebiaper Eusebia Nevarez
Advances in Behavioral Economics: Essays in Honor of Horst Todt: The connection of economic theory and behavior ...amzn.to/tlVUGN
Field401 Field401
@
@kpelton He does behavioral economics stuff...this NYT article is a good intro: nytimes.com/2008/03/19/hea…
Reinabpi Reina Ebner
Downloads Behavioral economics and its applications:Behavioral economics and its applications book download Ha...bit.ly/wm27vG
jonathanbingham Jonathan Bingham
5 questions to ask as your product approaches perfection: sgp.cm/72099e
josephkibe Joseph Kibe
Mitch Daniels clearly hasn't read Nudge, or any other research inbehavioral economics or psychology. amzn.to/xa6kuX
asgarcia Alan Garcia
Daniel Kahneman: The riddle of experience vs. memory #TEDon.ted.com/AFhR // Great talk from the founder of behavioraleconomics.
grbeaton George Beaton
Following my tweet on business.time.com/2012/01/19/eco…, I recommend A1 list of readings on behavioural economicsfarnamstreetblog.com/2010/04/behavi…
BiddRocket Brian Ley
Facebook Timeline and Behavioral Economics?jeffdechambeau.com/friending-fast…
paediax Diana Tsai
behavioral economics, cheating, and the stock market--enjoyed this ted.com/talks/lang/en/…
JenHaley Jen Haley
New app pays you to exercise: bit.ly/wwUfIf Great example ofbehavioral #economics!
moiracathleen moiracathleen
Great article on Behavioral Economics by @leighblueknowingandmaking.com/2011/11/does-n… We really do need to start talking about this more.
INFORMS INFORMS
Management Science's Special Issue on Behavioral Economicsand Finance, part 1 of 2. ow.ly/8EmLU #orj
Anibalqpb Anibal Lebouef
Financial Economics: A Concise Introduction to Classical andBehavioral Finance e-book downloads: Financial Econ...bit.ly/yOVwoc
WorthPoint WorthPoint
Popular on WorthPoint: Rinker on Collectibles: How BehavioralEconomics Effect Our Purchases ow.ly/8Dfu7
aurdale Erik Aurdal
Dan Ariely med ny bok 5. Juni. Fantastisk forfatter som skriver om temaer innenfor behavioral economics. wp.me/p5oiR-H8 via@danariely
Jamaloabr Jamal Corr
Downloads Advances in behavioral economics: Advances inbehavioral economics book download Colin F. Camerer, Geo...bit.ly/yiTryn
neuroeco neuroeco
最新号の Management Science は、行動経済学・行動ファイナンス(Behavioral Economics and Finance)の特集号! → Management Science mansci.journal.informs.org/content/current
ricardomexcan RICARDO
How to Buy a Car . . . Using Game Theory! | Think Tank | Big Think | @scoopit bit.ly/As7Scj
Conferenceboard The Conference Board
Behavioral economics and social media are coming together in new and compelling ways in employer health programs.ow.ly/8DEjR
thebehaviourist Neeraj Sharma
Where is behavioral economics headed in the world of marketing?shar.es/f0oKt
Ogminn Ogminn
Behavioral Economics Reading Listfarnamstreetblog.com/2010/04/behavi… via @farnamstreet
peoplepatterns Bri Williams
Converting browsers to buyers with tips from behavioraleconomics and a charity bit.ly/z39cch #behaveco
Starlauiz Starla Buhr
Experimental and behavioral economics e-book downloads: Experimental and behavioral economics book download J. M...bit.ly/ArcPbF
jonathanbingham Jonathan Bingham
My new blog offers some thoughts on how behavioral economicsconnects to product innovation:perfectionparadox.org/2012/01/perfec…
Aleaseloz Alease Chilton
Conflict and Cooperation: Institutional and Behavioral Economics: Allan Schmid’s innovative text, Conflict and C... amzn.to/sdfmyQ
em_i_lis EmilyG
Pizza night, behavioral economics, another gloomy daybit.ly/A98mp9
Routledge_BMA Routledge BMA
#FREEACCESS to the most downloaded articles on the Financial Crises, Behavioral Finance, Transport Economics & more!bit.ly/Av58Kc
uskbot うすけbot
行動経済学は絶望的か? - 本書Is Behavioral EconomicsDoomed?(『行動経済学は絶望的か?』)は、Open Book Publishersから刊行予定ということで、まだ正式には出版されていない。しか ow.ly/1gSciG
blosurf ブログ配達犬
アゴラ 行動経済学は絶望的か?: 本書Is Behavioral EconomicsDoomed?(『行動経済学は絶望的か?』)は、Open Book Publishersから刊行予定ということで、まだ正式には出版はされて... j.mp/xCDset
Sachaazt Sacha Lakatos
Reframing Health Behavior Change with Behavioral Economics:Behavioral economics is a rapidly developing area of...amzn.to/uNzG8W
WorthPoint WorthPoint
Rinker on Collectibles: How Behavioral Economics Effect Our Purchases ow.ly/8zANp
KeithaMenear Britt Kennard
Behavioral Economics: Politics, Law & Business: Learn aboutBehavioral Economics with iMinds insightful knowledg...amzn.to/pFOeDj
financeecon financial economics
Behavioral Relationships, Equilibrium Conditions, Accounting Identities...: it turns out in economics to be rem... bit.ly/AsMAln
Olliekgv Ollie Bartley
Advances in Behavioral Economics: Essays in Honor of Horst Todt: The connection of economic theory and behavior ...amzn.to/tlVUGN
KathrineInvest Kathrine Matthews
Overconfident investing is bad: There's a field of economic research — behavioral economics — where psychology p... bit.ly/zOnHrn
ePrussakov Geno Prussakov
Growing increasingly fond of neuromarketing & behavioraleconomics, I've just created this list: twitter.com/ePrussakov/neu…(whom have I missed?)
Sherryzbi Sherry Lyons
Conflict and Cooperation: Institutional and Behavioral Economics: Allan Schmid’s innovative text, Conflict and C... amzn.to/rIPn6k
northresearch Neal Cole
Marketers & Behavioral Economics - The Social Revolution! via@johnxkenny @jbell99 yhoo.it/zZ0j7F” #mrx #psychology #cro
BradAMurphy Brad Murphy
Behavioral economics is being leveraged by software apps in very interesting ways to change personal behavior. bit.ly/wY4i5B
eluzocax Brodsky Boyd
Wirtschaftspsychologie: Behavioral Economics, BehavioralFinance, Arbeitswelt (Springers Kurzlehrbücher der Wirt...amzn.to/wUMTak
Jaimeeagb Jaimee Mangione
The behavioral economics of foreign exchange markets:amzn.to/s1Rh4
Walton_Complex Walton Complex
Come to "Experiments with Behavioral Economics" Wednesday, February 1 from 7:00 pm to 10:00 pm. UO Economics...fb.me/ype648oa
MarketTools MarketTools, Inc.
What is behavioral economics and how is it used in market research? ow.ly/8ANKo #MRX
JPEnsell J Ensell
@danariely on how wanting to write a cookbook, broughtbehavioral economics to the masses inc.com/jeff-haden/the…
TandF_Economics Routledge Economics
Happy Friday! FREE ACCESS to top articles on the Financial Crises, Behavioral Finance, Transport #Economics & morebit.ly/Av58Kc
SentientInsight SentientDecisionSci
Using behavioral economics to strengthen brand preference:ow.ly/8z0Fp
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