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Loss Aversion and Hyperbolic Discounting. How we can take advantage.

André G.

Speedway Pass
Jul 30, 2017
We all know the typical advice from the general motivational/inspirational book or even The Millionaire Fastlane. Even though it may be great advice, most people get so hyped up but fail to be disciplined, sometimes even after just a few days.

I've been thinking about this. What would make someone overcome unwanted self behavior? How come some can and some can't? I'm not a psychologist but I'd like to share my experience on this...

Our minds are wired up in such a way that we have Loss Aversion and Hyperbolic Discounting.
Loss Aversion states that, to our minds, losses are twice as valuable as gains and Hyperbolic Discounting means that our brains value things in the present much more than things in the future (disproportionality more).
These conditions make us do some stupid decisions like valuing procrasting now more than achieving an Unscripted life in the future.

So it is clear that to master your behavior you need to apply your mind to overcome genetics. The question now is simple... How?

Here's where "my experience" part comes.
Ever since I read about Loss Aversion (LA) and Hyperbolic Discounting (HD), I've commited to taking freezing cold showers everytime I make a behavior mistake. Why would I do this? Well, with these conditions in mind, if you compare 2 positive things your brain will always choose the one that is to be done right now (HD). If you compare 2 negative things your brain will choose the one that is far away in the future(HD). BUT if you compare 1 negative thing right now and 1 positive thing in the future, your brain will choose the positive thing! (LA+HD) Example: if you compare procrastination right now (gain) and Unscripted life later (gain), the majority can't help but fail to procrastination, but if you compare taking a freezing cold shower (the coldest you can get your water to be = loss) with Unscripted pursuit, you will surely pick Unscripted! This is because taking a freezing shower takes such a significance because it's a loss and it's in the present.

Our solution is simple: commit to large negative loss in the present (something you could at any time is better) everytime you make a behavior mistake. That means you only get 2 choices: loss or gain. You'll pick gain. Since I started this rule of commitment I only made 1 mistake. That's where the loss really hit me :D

Sorry for the long text and the poor write up. It's 00:35 in here and I've been up for 18 hours. Just wanted to share this with everyone and hopefully someone finds this valuable.

Peace everyone,
André G

EDIT: someone please try this and let me know your results!

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