February 2

Going Mental

Saturday’s Big Idea

Loss Aversion

Humans, like our primate ancestors, really don’t like losing things. In fact, we get much more emotional about losing things than we get happy about gaining things. Our loss aversion, as this bias is called, has an enormous impact on our behavior in many areas -- from how we take care of our bodies to how we make investments. 

In today's lesson, Tim Ferriss introduced a completely counterintuitive way to take advantage of our loss aversion. Since we really don't want to give things up, especially to groups that we don't like, then the threat of losing things, such as money, can be a powerful motivator to help us achieve a goal, whether it is learning a new language or quitting smoking. 

  1. 1 How the Westboro Baptist Church C...
  2. 2 Monkey Economics: The Evolutionar...
  3. 3 Rethinking the Endowment Effect: ...
  4. 4 How Rational Are You? Try This Quiz
   
  1. How the Westboro Baptist Church Can Help You Lose Weight

    How the Westboro Baptist Church Can Help You Lose Weight

    Do you want to learn to play the guitar? Speak Spanish? Lose weight? Then set aside $100 of your pretax income to donate to the Westboro Baptist Church.

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  2. Monkey Economics: The Evolutionary Origin of Loss Aversion

    Monkey Economics: The Evolutionary Origin of Loss Aversion

    Dr. Laurie Santos’s studies of monkey “economics” suggest that greedy, loss-averse human behavior may have deep evolutionary origins.

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  3. Rethinking the Endowment Effect: How Ownership Affects Our Valuations

    Rethinking the Endowment Effect: How Ownership Affects Our Valuations

    The “endowment effect" explains our irrational tendency to overvalue something just because we own it.

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  4. How Rational Are You? Try This Quiz

    How Rational Are You? Try This Quiz

    The questions in this quiz are adaptations of items from research studies from the 1960s to the 1980s, initiated by Daniel Kahneman and his late research partner, Amos Tversky.

    Read More…