I think one of the major results of the psychology of decision making is that people's attitudes and feelings about losses and gains are really not symmetric. So we really feel more pain when we lose $10,000 than we feel pleasure when we get $10,000.
Interpretation
People experience loss more intensely than gain, reflecting an asymmetry in human emotions.
This quote by Daniel Kahneman emphasizes the concept of loss aversion in psychology, which suggests that the negative emotional response to losing money or resources is greater than the positive emotional response to gaining an equivalent amount. As a result, individuals are often more affected by losses, which influences their decision-making and risk assessment, leading to a psychological bias where avoiding loss becomes more significant than acquiring gains.
In practice
In a financial workshop discussing investment strategies, one might say, 'As Kahneman noted, we feel more pain when we lose money than joy when we gain it, so be prudent in your choices.'
We think, each of us, that we're much more rational than we are. And we think that we make our decisions because we have good reasons to make them. Even when it's the other way around. We believe in the reasons, because we've already made the decision.
The average investor's return is significantly lower than market indices due primarily to market timing.
Banks are run by executives, and executives protect themselves, and that does not always mean that banks are going to behave rationally.
Laziness is built deep into our nature.
Through some combination of culture and biology, our minds are intuitively receptive to religion.
You are more likely to learn something by finding surprises in your own behavior than by hearing surprising facts about people in general.
Many psychopaths describe the traditional treatment programmes as finishing schools where they hone their skills. Where they find out that there are lots of techniques they had not thought about before.
In psychology and behavioral economics, people have shown that if you just describe options in a certain way, or make some features of a situation salient, you can get people to do and even see what you want. You don't have to be a Jedi to manipulate people's attention.
Interpretations, criticisms, diagnoses, and judgments of others are actually alienated expressions of our unmet needs.
We teach people that they upset themselves. We can't change the past, so we change how people are thinking, feeling and behaving today.
Worrying about scarcity is our culture's version of post-traumatic stress. It happens when we've been through too much, and rather than coming together to heal (which requires vulnerability) we're angry and scared and at each other's throats.
Wherever an inferiority complex exists, there is a good reason for it.
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