The Psychology of Training: Loss Aversion

Last week while walking through the train station, I heard someone from behind repeatedly calling out “excuse me sir, excuse me sir”. Admittedly I was not paying attention as I was staring down at my phone busily replying to an email. The man finally got my attention by catching up to me and tapping me on the shoulder. Somewhat startled I noticed he was holding out a $50 bill and was asking me if it was mine as he saw it drop to the ground near me as I walked. Immediately an emotional wave hit me and I checked my front right pocket where I remembered putting the money and found it empty. It had obviously fallen out when I took out my phone.

The first thing that I thought of after putting the money back (into a different pocket) was how angry I would have been if I had lost the fifty dollars. The sharp increase in anxiety I felt mirrored this thought.

Over the holiday season, I lost an Amazon gift card (also fell out of my pocket) that was given to me by a patient that still makes me angry, especially when I open the app to buy a new book for my kindle. The thought of having to pay for it, rather than getting it for “free” by using a gift card seriously frustrates me to this day.

Why does the feeling of loss trigger such emotions?

It comes from the psychological concept of loss aversion, a well studied behavioural concept that holds true in many different circumstances.

Loss Aversion Explained

Why are humans so afraid of losing?

It’s hard to not focus on loss. It’s built into our DNA to pay more attention to the things we could potentially lose rather than those things that we could potentially gain. Think about this at it relates to yourself, keeping in mind my story above. If the young man called my name and instead of returning the money I lost, actually gave me a fifty dollar bill, it wouldn’t have had the same emotional affect, it wouldn’t have triggered such a sharp reaction. I simply would have moved on about my day. If I had never received and then subsequently lost that Amazon gift card it wouldn’t bother me every time I check out and am unable to use it.

In effect, losses hurt much more than gains as they have a greater psychological effect than similar gains. As Daniel Kahneman states in Thinking Fast and Slow, “the response to losses is stronger than the response to corresponding gains”.

Kahneman, and his colleague Amos Tversky discovered the effect of loss aversion during their research collaboration in the late 1970’s. Loss aversion is a piece to their much larger Prospect Theory (more on this later) in which humans make improper value judgements or misunderstand the probability of events happening and therefore make suboptimal decisions, in essence creating bias that influences the individual’s clarity when making decisions under constraint. Initially studied using economics as the background, Kahneman and Tversky showed that individuals would agree to pay for a more likely (higher probability) albeit smaller cost than a potentially greater although less likely (lower probability) cost. This demonstrates our specific bias to avoid or be averse to what is deemed to be a greater “amount” of loss even though when all information is considered the chance of that loss is actually smaller.

Kahneman and Tversky also showed that loss aversion drives a greater potential for individual bias, as a result of a greater emotional influence the larger the potential loss is. This has significant consequences as the outcomes will have the potential to be extremely different because the fear of incurring (potential) losses can prevent us from taking even well-calculated risks, with potential for positive returns.

Loss Aversion Activates Certain Areas of the Brain

Why is loss aversion so powerful?

Since its inception within the science of human psychology and behaviour, much has been studied regarding the neurophysiological basis of the feeling of loss. It has been shown that the brain regions that process value and reward may be silenced more when we evaluate a potential loss than they are activated when we assess a similar-sized gain.

Many of the studies use financial losses and gains as the means to gain information. It has been shown repeatedly that there is increased neural activity in the participants' reward circuitry as the amount of the reward increased, and decreasing activity in the same circuitry as the potential losses accrued. In addition, the reactions in the subjects' brains were stronger in response to the possiblity of loss rather than to the possibility of gains. This line of research inquiry and the subsequent results it has produced continually show the “built-in” neural wiring of being both loss and risk averse.

Much of this “neural” component of loss aversion spreads widely through the CNS but relates to a brain region known as the amygdala, which is a cerebral region of nuclei located in the temporal lobes that has been associated with the human “reward” system and how that impacts, memory, emotions and decision making.

Loss Aversion is Relative to a Reference

The human reward system and the control of it within the CNS is subject to the experience and subsequent conditioning of the specific individual. This is what makes an understanding of behaviour under uncertainty important for the strength practitioner and how we can best move our clients/patients to focus on what they have and can gain rather than on what they don’t have.

An individuals propensity to be aversive to loss is largely dependent on their past history of behaviours with respect to wins and losses. Previous outcomes play a contributing factor in how an individual will evaluate making a decision under uncertainty that involves them and their perceived potential results of the current decision. The more associations there are with a particular behaviour the more ingrained the conditioning becomes especially if there is an experience of a loss or the potential for one.

Loss Aversion Within High Performance

It is a simple fact that dealing with clients, particularly in a clinical setting, a rehabilitation setting or in a performance setting where an athlete is injured, they will tend to focus on what is still potentially limiting them rather than on what they have achieved to that point - a very simple display of loss aversion.

In this type of setting loss aversion is often reflects the critical role of negative emotions namely anxiety and fear that are tied into the client’s perceived inability to know the future. The stress of the unknown causes them to be blind to the progress and the potential for continued progress and rather focus on the potential of not achieving what they expect.

How to Change from Loss to Gain

This can be a very difficult position for the strength practitioner to be in as it can be a tough task to get our clients in these situations to move away from loss aversion. It is important that we learn to adapt to those clients that display loss aversive behaviour as this can drastically change their outlook and their outcome.

The key is to change the emotional context of the client. By manipulating the interaction to focus on what could be rather than what was is a valuable way to influence the client towards minimizing fear and anxiety as well as re-conditioning their neurology to understand that small wins can be highly probable provided there is a system in place to achieve them.

How do we do so?

1. Put loss into perspective.

   During our interaction with loss averse clients it is important to acknowledge what they are dealing with (injury or otherwise) but at the same time discuss its importance to other parts of their life. This changes the ratio and allows them to see that loss is relative.

2. Change the frame.

   If given the choice, clients will always tell the practitioner what they don’t have. This is a clinical reality and does hold true in various other settings. If clients are able to lead the conversation it will undoubtedly focus on the lack of progress. For example focussing on a sensation “my back still hurts” or an experience “I still can’t do a squat” are common. As practitioners it is important that we lead the conversation toward the gains made as a way to change the reference for the client. “Tell me how much your shoulder has improved since last session” is an example as it changes the frame toward the positive.

3. Create autonomy

   Giving the client a measure of autonomy is another important tool to change loss aversion. Even if we as the practitioner know what exactly inputs the client should be doing and the appropriate freqeuncy, sometimes it is important to minimize our control and give more to the client. As an example, with exercise prescription, giving the client the constraints and allowing them to choose and/or demonstrate which exercise they deem to be the most appropriate for them while satisfying. the constraints is an easy way to create autonomy and skin in the game. This allows the client to see the probability of gain rather than loss.