We’ve already established humans don’t handle risk well. We
worry about plane crashes and tsunamis while stuffing our faces full of butter
and sugar on the fast track to diabetes and heart disease. And it’s not just
probability we struggle with, it’s impact. We don’t do a good job weighing
potential consequences of unknown outcomes.
Consider a game where you have two dice, and every time you
roll them, there is either a payoff or a loss. Let’s pretend every time you
roll double sixes, you get paid ten dollars. But anything else costs you ten
cents. Any other outcome outside of double sixes is a loss. While the odds of
rolling doubles sixes are low (1 in 36), the cost of the loss is relatively
low, and the payoff for a win is disproportionately high. (Statistically, every
$10 win “costs” you about three and a half bucks in losses.)
You would lose far more than you win, but the rare wins
would more than make up for the many losses. However, the tangible cost of the
losses pale in comparison to the emotional impact of all those outcomes without
a victory. You may roll the dice ten or twenty times in a row and then give up,
not because you ran out of money, but because the psychological toll of losing
has become too great. So you chose another game. A game where you have a sixty
percent chance of winning one dollar and a forty percent chance of losing two
dollars. The odds of winning are much better, but you have given up your
advantage in the payoff and have chosen a losing proposition in which the
longer you play the more money you lose.
We make very similar decisions in life. Worn down by the
emotional cost of mounting losses, we ignore potential payoffs and choose
“games” where we don’t benefit much from a “win,” but we don’t lose as often.
We chose “safe” jobs, “safe” relationships and “safe” conversations in which we
don’t ever share anything of value but at least we don’t offend anyone. Just
like the gambler in the second game scenario, we slowly lose over time. It’s a
gradual erosion of our beliefs, our honor, our self-worth, our passions and our
value. It hurts less in the moment, but
it destroys us in the long run.
We must learn to take risks that, while having the high
probability of a loss, have a disproportionate payoff for a win. And we must
have the persistence to keep playing, even as the pain of the mounting losses
would steer us away from eventual victory. One more loss is just another step
closer to a win.
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