Ch 2: Loss Aversion: Or, the Upside of Going to Bed Angry

In lab experiments, economists have determined that humans hate losing so much that the fear often causes us to do strange and destructive things.  Hence, you have stockbrokers who throw good money after bad hoping to recoup losses or that stocks will rebound.  But it turns out we hate losing twice a badly as we like winning, so "loss aversion" is a powerful force in human behavior, particularly relationships.

Loss aversion causes us to act irrationally, including changing our minds on a whim, making rash decisions, choosing lesser short-term gains over greater long-term gains, feeling overconfident, and of course fearing change.  In our marriages, it causes us to stay up all night to win a fight, futily trying to convince the other to see things our way.  It urges us to dig in our heels through pride or give the other the silent treatment. And eventually, instead of cutting our losses, this vicious cycle leads to compounding loss over time.

Solution: Sleep on it.  

In other words, go to bed angry.  Get a good night's rest and return to the subject later.  Invoke the "24-hour rule" in which you agree to shelve the discussion and return within 24 hours.  Things usually seem much better in the morning.

In addition to loss aversion, humans tend to value there own stuff irrationally.  Economists refer to this as "the endowment effect."  We endow things we own with sentimental meaning that aren't supported by the market.  The example the book gives is of a wife who wouldn't give up a natty old recliner because it represented the freedom of her single days. But the principle of loss aversion gets to the heart of why compromise is hard--we hate to lose.

Solution: Reframing

Recasting losses in terms of gains (or vice versa) can often change people's perspective on a conflict.  The wife above might think to herself, "Am I losing a La-Z-Boy or gaining a happy home?  Am I losing something sentimental or gaining a chance to buy something beautiful?" (53).  Our willingness to compromise often hinges on whether we see our action as resulting in a loss or a gain.

A phenomenon that feeds loss aversion in relationships is nostalgia and the rose-colored glasses of memory (my phrasing, ha).  We often look longingly back at the honeymoon, new-relationship-energy period of our relationship and see the present as loss. This problem in economic terms is called "status quo bias." This bias causes us to "strongly prefer the known and familiar over the unknown and unfamiliar.  Any change means losing, and that's something our monkey minds aren't very good at" (61).

Solution: Focus on the Present

Wait, they didn't write that.  But I have to mention it here, since it's implied, and I wouldn't be a Buddhist worth his salt if I didn't point out that focus on the past causes suffering because we want something that no longer exists.  In Zen, the future too is a fiction, but for these authors, it's a useful one because it can be a useful incentive (but more on that in Ch 4).  Suffice it to say here that re-imagining the future can help us reframe our status quo bias.  Instead of thinking about how the fire is gone out of your sex life, focus on what your relationship has gained in terms of intimacy, knowledge, and commitment.  Let the past go, no matter how great you think it was (and it probably wasn't that great anyway).

Solution: Active Decision-Making

Obsessing about a past that has disappeared can not only get relationships in a rut but can create problems that don't exist.  "Take an active role in the decisions that affect your life," Paula and Jenny write, "rather than sitting back and letting those call the shots for you" (65).  Passive decision making, just allowing things to happen, is what causes ruts and makes us miss opportunities for gain.

Reframing and focusing on the present are both active decisions that can help you control your aversion to loss, but there are others.  If you aren't having enough sex, then decide to have more sex.  If you sex life is in a boring rut, spice things up.  If you think that happy days are all in the past, sit down with your spouse and write out a comparison like this:

From pg. 67

The authors rightly point out that the list on the right isn't comprised of losses--those items are merely different--we apply the value of better or worse (pun) to them based on what?  Hollywood?  And this kind of listing can lead to other active decisions, like the choice to "resurrect" some things from the list on the right.