How to Combat the Effects of Loss Aversion

Posted on November 07, 2018 by Alex Auerbach, One of Thousands of Executive Coaches on Noomii.

Loss aversion is the innate human tendency to hold on to things that we have and to value them higher than things we could potentially earn. Loss aversion is present in most areas of our lives—social, financial and academic, as well as athletic.

In our previous article, we discussed the impact of loss aversion on decision making in sports. With the field goal example, we saw that loss aversion causes us to replace logic with fear. Instead of playing to win, we play not to lose.

To combat some of the effects of loss aversion, consider the following suggestions.

Practice
Try to practice uncomfortable. Getting out of your comfort zone forces you to adjust, ultimately expanding your comfort zone. Practicing scenarios where you face failure and experience loss teaches you how to adapt. The goal is never to enjoy failure, but to learn to accept it as part of sports. This will allow you to be more fearless when the time comes to make a pressure shot. Isn’t that what everyone is looking for? We all want the confidence to take and make the last shot when it counts the most.

Think Logically
Assess what can be gained and lost in your specific scenario. Remember, if there were no risk involved, there would be no pleasure in attaining your goal. For example, if you just want to win, compete against eight-year-olds. You will win every time, but the competitor in you will not enjoy it, because there’s little value in beating a non-challenging opponent.

Keep Perspective
Track your successes and failures. But most important, remember what you learned or what you gained or lost in both situations. Doing so will make you aware of future risks and whether or not they are worth it.

Keep Your Eyes on the Prize
As a student-athlete, you have both short- and long-term goals. Think about how avoiding particular losses will affect the “bottom line.” Some decisions will have a larger impact than others, but you’ll never know until you try.

Love Your Sport
To be successful at any level, you have to love what you do. You spend more hours and effort on your sport than anything else. If you don’t love it, you’re likely to be miserable; and you’ll be more likely to make decisions influenced by loss aversion, which will minimize your potential gains and the greater pleasures of your sport.

This article was co-authored by Dr. Scott Goldman’s sport psychology intern, Alex Auerbach.