Annie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

So winning $100 at blackjack feels as good to us as losing $50 feels bad to us. Because being right feels like winning and being wrong feels like losing, that means we need two favorable results for every one unfavorable result just to break even emotionally.

the €100,000 offer, but at least you won't leave empty-handed. The upshot of all this is that you badly miscalculate the risk. You keep on chasing after the possibility of a big gain because you can't accept the prospect of a loss. Your emotions have sabotaged common sense. Loss aversion is an innate flaw. Everyone who experiences emotion is vulner

Understand the principle of  loss aversion : We tend to fear losses more than we desire gains. Keep it in mind when considering different options and risks.  Sometimes the most dangerous thing you can do is play it safe

The way we field outcomes is path dependent. It doesn’t so much matter where we end up as how we got there. What has happened in the recent past drives our emotional response much more than how we are doing overall. That’s how we can win $100 and be sad, and lose $100 and be happy. The zoom lens doesn’t just magnify, it distorts.

are driven more strongly to avoid losses than to achieve gains.”3 This is why putting ourselves out there, engaging people who might dismiss or reject us, is so scary. Because in the one-off situation, the pain it will cause is perceived as stronger than the positive feelings of acceptance. The trick is to start looking at outcomes in the aggregate

People hate losses (and their Automatic Systems can get pretty emotional about them). Roughly speaking, losing something makes you twice as miserable as gaining the same thing makes you happy. In more technical language, people are "loss averse." How do we know this?Consider a simple experiment.13 Half the students in a class are given co

However, we also want to keep in mind that our primitive brains aren’t so great at discerning between real safety and a threat to our discomfort or self-image. This means that most of the time we’re playing it far safer than we need to. And strangely enough, it’s our desire to avoid screwing up that often screws things up.