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Monday
May022011

Loss

I've been re-reading Jonah Lehrer's fascinating How We Decide,a an examination of decision-making from perspectives such as neurology, psychology, and economics. One of the more resonant sections for me as a performance coach has to do with the concept of "loss aversion."

Loss aversion in this case, refers specifically to the concept of losing something, or an amount of something, that you already have, as opposed to "losing a game." As described by Lehrer, people tend to want to hold on to what they have unless the potential gain from a risk is much larger than a potential loss. For example, in an economics lab, in order to risk $20 on a coin flip, people demanded, on average, the potential to win $40 (odds of 2-to-1). The economists interpret this as, "The pain of loss was approximately twice as potent as the pleasure generated by the gain." Whether that precision carries over to other arenas or not, this shows that people are generally disposed against risking what they have.

This carries over to real-life economic situations as well. When people have money to invest, the two most common options are putting the money in stocks or bonds. Bonds offer low returns, but are backed by the government, as opposed to stocks which are thought to offer greater returns but carry the risk of becoming worthless. However, in the past hundred years or so, stocks have never actually under-performed bonds over anything but the short term. In fact, Lehrer says, "since 1926, the annual return on stocks after inflation has been 6.4 percent, while the return on Treasury bills has been less than 0.5 percent." Another analysis claims that over the past century, the chances of a the S&P 500 losing money in a 10-year period is only 6%.b In other words, there's a small chance that stocks will lose money is the medium term, but in the long run, stocks are the better deal, and almost always by a huge amount. However, something keeps people investing in low-yield bonds, and Lehrer argues that it is the small chance of loss looming large in the psyche.

--

What might we lose in playing a game or singing a song? Professionals in individual sports have money at stake for sure, but even then, it's rarely money that they have put up in order to play (Professional poker is an exception.). In other words, though players usually can only win prize money, they may feel it as a loss if they don't win what they expect (and including training, equipment, and travel costs, they certainly can lose money on a trip to a tournament). Professional musicians are always auditioning for the next gig.

For the amateur, the money is the same whether they win or lose. For them, the stakes are purely intangible, though professionals have many of these same things on the line. I'm reminded of the the Buddhist idea of the five universal fearsc which prevent happiness:

1. Fear of loss of life

2. Fear of loss of livelihood

3. Fear of loss of reputation

4. Fear of unusual states of mind [loss of sanity, perhaps]

5. Fear of public speaking

It's interesting to me that most of these fear are described in terms of loss. All of these fears can affect our behavior, and Lehrer would argue, they can cause us to act illogically. Let's look at how each fear can manifest itself in performers.

1. Fear of loss of life - Not a relevant factor for most performers (except wingsuiters!), but may manifest itself in fear of injury. 

2. Fear of loss of livelihood - This is only literally true for professional and scholarship athletes and professional artists, though it may be part of an aspiring professional's mindset. For amateurs, this could come into play for people worried about their playing time within a team.

3. Fear of loss of reputation - This can affect any performer, from the kid who wants to impress his uncle, to a tennis coach facing one of his players in a practice match, to a veteran performer trying to prove something to herself. This is the big one for amateurs.

4. Fear of unusual states of mind [loss of sanity, perhaps] - Performers sometimes cannot straighten themselves out. This could be a loss of temper, an inability to focus through distraction, or the helpless feeling of one's mind going blank at a critical moment. In subsequent performances, they may fear returning to these states.

5. Fear of public speaking - Whether vocally, musically, or metaphorically "speaking through competitive performance," this fear can come into play for all performers. It is the fear that the sum of what they do will not be good enough, or that they will not perform to their capability. I think it's related to "loss of reputation" except that you are facing a group of pepole who are watching this happen.

--

 So how does loss aversion function in real life? The performer focuses on the idea of losing something, feels the negative emotion, and it leads to illogical thought and play.d A very common example goes like this: two tennis players are set to play a match in the club tournament. Roger has a slightly higher ranking and can consistently hit the ball a little harder than Bob. Everything else is equal between the two, but because harder hit balls are more difficult for the opponent to control, Roger should be able to overpower Bob, create some errors and openings, and win the match.

After a few games, Roger is not playing great and makes a couple of unnecessary errors. Here's where the fears can take hold: #3 (reputation) all the players at the club will know if he loses, #5 (public speaking) because there are people watching the match, and he'll have to report the score afterwards, #1 (life) because he'll be out of the tournament, and #4 (unusual states of mind) because losing feels terrible sometimes, especially when you feel you should win. Do you actually know anything about tennis? Are you actually any good? These are not fun states of mind.

Now, of course, logic dictates that Roger should simply hit the ball as he always does. In the long run, he'll be fine because he hits harder and Bob will not be able to keep pace. But in reality, a poisonous thought often creeps in: Roger thinks that if he avoids mistakes, he'll be fine, so he stops hitting quite so hard. In this way, Roger abdicates his one clear advantage in the match, and is doomed to a long afternoon of frustration (regardless of whether he wins or not!).

Another example of this would be a singer in an ensemble who doesn't want to be heard to sing a wrong note. In order to avoid loss of reputation, or, potentially, removal from the group, she sings at a lower volume. Unfortunately, this means she can't use good breath and technique, so she's less likely to nail her notes and sound good. 

--

The solution is to become at peace with those fears, and recognize the importance of facing the task at hand. Our awareness of our fears and reactions to them can give us the tools to perform effectively in important moments. Roger can learn to recognize his first moment of wanting to back off from his powerful shots and work to give himself permission to keep playing his own game. He can focus on the opportunities that each match brings rather than the potential losses. The singer can practice her technique, monitor her breath, and return to fundamentals whenever she feels that tension is restricting her. Neither of these things are necessarily easy to do, but there is a perception that great performers don't ever encounter these fears. There's a reason these are described as Universal fears, after all. The truth is that great performers have faced their fears down and have learned to concentrate on the steps they need to take to perform at their best in each moment. 

 

a. If you like Malcolm Gladwell, this is a book for you.

b. Marotta Wealth Management analysis. http://www.caar.com/rew/article/639 

c. Attributed to the 5th century monk Vasubandhu.

d. Lehrer gives an interesting example in which doctors were instructed to choose between two imperfect plans for treating a population of patients exposed to a disease. Doctors generally preferred a solution that spoke in terms of how many patients would be saved if the treatment worked rather than how many would be killed if it didn't. The negative emotion of losing those patients clouded the fact that the same percentage of people lived and died in either case.

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