Risk Avoidance Is Not a Good Strategy for Happiness
Updated: May 5, 2022
If we knew exactly what our future holds, life would be extremely boring
The pandemic gave many people an opportunity to think about what they really want in life and dream some new dreams. However, most people never attempt their greatest aspirations or make big changes in their lives. There can be lots of reasons for this, but one that often comes up is not knowing how things will turn out, which can make people very nervous. Absent a guarantee of success, many will cling to what seems known and safe instead of going for what they truly want. But is the goal of life to mitigate risk or be all that you can be?
Seduction of the status quo
There is an old proverb that goes, “A bird in the hand is worth two in the bush.” Essentially this is saying that it is better to hold onto what you have rather than risk losing it trying for something better. From an evolutionary standpoint, this makes some sense. Human history is full of lost bets, some of which were rather painful and decisive. But history is also increasingly full of curious and courageous people who ventured into the unknown to create meaningful lives for themselves and contribute to the betterment of society.
Unfortunately, our brains seem stuck in the proverb, being predisposed to fear what we cannot predict. Even if we see the potential for something better, there is a tendency to stick with the sure thing. Modern studies repeatedly prove that people overweight certainty in making decisions, meaning they assign greater value to what is known. This was first discussed in the 1979 seminal paper, Prospect Theory: An Analysis of Decision under Risk, by Daniel Kahneman and Amos Tversky, which showed that people will often forgo the chance to win a larger prize in favor of a lower prize that is guaranteed.
For example, when deciding between a sure gain of $450 or a 50% chance of gaining $1000 or $0, most people choose to take the $450, thus violating expected utility theory and leaving potential money on the table. However, the behavior flipped when it came to losses. When deciding between a sure loss of $450 or 50% chance of losing $1000 or $0, most people gamble. As Kahneman and Tversky put it, “losses loom larger than gains.” The pain we feel around a loss is more pronounced than the happiness we feel about a comparable gain, and so we will risk more to avoid it. The result is that we optimize around loss aversion and certainty instead of the best outcome.
Kahneman and Tversky
We see this theory play out in real life all the time. Think of the decision to stay or leave a significant relationship. Even if fraught with problems, many people will choose to stay in the relationship they know and have some certainty about instead of gambling on the potentially better relationship that is out of sight in the future. People will accept the devil they know versus the potential angel they don’t. The same goes for a job. Many people will stay in a job or career they don’t love because they worry that even if they get a new job that they won’t end up liking it as much as the old one. And so people stay stuck, biased toward the status quo.
But are we here on Earth to repeat the same basic experiences over and over?
As Pablo Picasso said, “To repeat is to go against the laws of the spirit, its forward motion.”
Where is the growth and expansion in retreading a path so many others have already walked? Will we truly be happy if we say no to our dreams and desires because we don’t know how they will turn out?
In our discomfort with uncertainty we attempt to control the conditions and situations of our life. But part of what makes life interesting is not knowing everything in advance. By not knowing, we get to experiment and be surprised. We get to wonder and anticipate. We get to play with possibilities and learn from what unfolds. As things unfold, we have the thrill of new choices. Should we actually achieve the certainty we think we want and be able to see the future, life would get rather boring. Like a good movie, it is the suspense that makes it interesting.
We also tend to forget that we didn’t know exactly what today would hold when it was still a tomorrow and we made it through the day nonetheless. Whatever strength and creativity we brought into today to make choices will be with us tomorrow and the next day and the next. It is when we relax into the present moment and know that we can choose how we experience tomorrow that we start letting go of the fear that caused us to clench and cling in the first place.
Doing things differently
One of the suggestions Kahneman and Tversky make to avoid bias is changing the reference point from which we evaluate decisions. Instead of looking solely at gains and losses relative to our current position, we should look at the bigger picture and ultimate outcomes. Going back to the proverb, losing the bird in your hand could very well be worth it if those two birds in the bush set your heart ablaze with their song. And who knows? Perhaps you find a way to end up with all three.
When we place more focus on what we want, our perception of risk changes. The risk of losing what we already have, which is usually a worst-case scenario, is overtaken by the joy and excitement of following our dreams. The bigger risk is not failing but not having even tried. For when we don’t try, we are losing out on the future we really want. And that is a gamble we are likely to regret.
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