In our evolutionary past, a lot of things led people to an immediate exclusion from the game “in the theater of Life”: carelessness on the hunt, sore tendon, expulsion from the familiar circle. People who were indiscreet or too fond of risks died without passing their genes on to the next generation. The cautious and prudent survived.

The dark side and the light side
Think about how good your mood is today – on a scale of 1 to 10. Two questions: first, what could maximize your joy in life – up to 10 points? Maybe your summer house, which you have been secretly dreaming about for a long time? Or climbing the career ladder to the next step? Secondly, why could your life get worse – at least by the same number of points? Illness, depression, a stain on your spotless reputation, financial ruin, the loss of your best friend? You can see for yourself: the “dark side” is clearly more extensive than the “light side”. There is more bad in the world than good.

It is not surprising that the losses seem to us more significant than the gains. If you lose 100 euros, it will take away more joy from you than if you were given 100 euros. It has been empirically proven that a loss is perceived approximately twice as hard as a gain of the same magnitude. Science calls this loss aversion . version ).

When you want to convince someone of something, let your argument be directed not at the expected gain, but at how to avoid possible losses.

The fear of a possible loss motivates people much more than the thought of a possible gain of the same magnitude. Let’s say you supply home security equipment. Clients will be more interested in your offer if you tell them how much money they can lose without a proper security system, and do not stress how much they will save with good security. Even if the amount is the same.

Employees of companies (at least when they are personally responsible and not subject to “ groupthink ”) are more likely to be afraid to take risks. They are more willing to take a wait-and-see attitude, and the bottom line is this: why take a risk if at best it will bring a nice bonus, and at worst it can cost you your place? In almost all companies, and in almost all cases, the risk of a career downfall outweighs the potential gains.

If you are a manager and you are unhappy that your employees do not have the courage to take risks, then now you know the reason. It’s because of the loss aversion that we all have.