#161: Loss Aversion, Foot-In-The-Door Technique & TANSTAAFL
3 Ideas in 2 Minutes on the Cost of Decision-Making
I. Loss Aversion
Loss Aversion is our tendency to prioritise avoiding losses over acquiring gains. Here’s the late psychologist Daniel Kahneman who pioneered the concept:
When directly compared or weighted against each other, losses look larger than gains. This asymmetry between the power of positive and negative expectations or experiences has an evolutionary history. Organisms that treat threats as more urgent than opportunities have a better chance to survive and reproduce.
—Daniel Kahneman
We generally feel the pain of losses more acutely than the pleasure of equivalent gains, so decisions often aim to minimise potential downsides.
II. Foot-In-The-Door Technique
The Foot-In-The-Door Technique is a psychological strategy of persuasion. First, you’re asked to agree to a small, easily granted request. This increases the likelihood that you will later agree to a larger, more significant request.
From the perspective of the persuader, they aim to secure a small commitment, which influences the other person’s self-perception. The persuaded, on the other hand, now see themselves as cooperative or helpful, which makes them more open to subsequent requests. Simply put, the Foot-In-The-Door Technique creates a personal connection at an initial low cost.
First, they make you to sign the petition. Next thing you know, you’re being shipped to the Arctic to save the baby seals. First, he wants you to sign up for a “free” newsletter. Next thing you know, he’s asking for $3 on Patreon.
III. TANSTAAFL
I put the “free” in air quotes because There Ain't No Such Thing as a Free Lunch (TANSTAAFL). This famous adage emphasises the idea that every benefit or service comes with a cost, whether it's direct or indirect. The “lunch” reference has its origin in the practice of American bars offering free food to customers so they would drink more.
This newsletter may appear to be “free”, but there are hidden (metaphorical) costs involved. Costs for the creator, as I still have to put time and effort into writing it. And for the reader, as you’ll see more calls to get on board with my affiliate MasterClass or join my Patreon. At the end of the lunch, resources are scarce and decisions always involve trade-offs. 🐘
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Have a great week,
Chris
themindcollection.com