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Choiceology: Season 2 Episode 1

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From ethical behavior to athletic competition, the disproportionate drive not to lose can lead to major mistakes. 

Winning feels good. Whether it’s nailing a tricky golf shot or landing a big client for your firm, it’s nice to come out on top. But is it the thrill of victory that pushes you to sink that 10-foot putt or compels you to put in a few extra hours at work? Or is it the fear of losing that motivates you more?

In this episode of Choiceology with Katy Milkman, we examine a bias that affects the irrational way people often react to gains and losses.

  • The episode begins with the heartbreaking story of Robbie Powell. A missed medical diagnosis and an elaborate cover up expose the lengths to which some people are willing to go in order to avoid a hit to their reputations.
  • You’ll hear from professor Dolly Chugh from New York University’s Stern School. Dolly and collaborator Molly Kern have done some great research demonstrating how people behave differently when making ethical choices in the face of a potential loss versus a potential gain. You can learn more about this phenomenon in her book How Good People Fight Bias: The Person You Mean to Be.
  • Then renowned golf coach Hank Haney describes how Tiger Woods and other golf pros seem to work harder to avoid bogeys on the putting green than they do to make birdies. According to Wharton School professor Maurice Schweitzer, professional golfers may be missing out on hundreds of thousands of dollars in winnings because of this tendency. And he’s got research to prove it.
  • Finally, Katy will leave you with practical tips on how to limit the influence of this bias in your own decisions.

Choiceology is an original podcast from Charles Schwab.

If you enjoy the show, please leave a rating or review on Apple Podcasts.

Click to show the transcript

Katy Milkman: Hi, I’m Katy Milkman, and this is Choiceology.

Speaker 2: Small soy latte for Ellen.

Katy Milkman: Wait, what? You’re thinking, “Why are we in a coffee shop, and where’s Dan Heath? Well, I’ll explain the coffee shop part in a moment, but first, as you may have heard from our preseason update, Dan has handed me the keys to the show. He’s off working on a new book and some other projects, so I’m thrilled to be with you as the new host of Choiceology. We’re going to build on some of the concepts that Dan introduced you to in season one, but we’re also going to explore some new ideas that I’m really excited about. We’ve got a bunch of amazing stories to tell, and we’ll be joined by some of the brightest minds in psychology and behavioral economics.

 OK, let me tell you a little bit about me. I’m a professor at the Wharton School at the University of Pennsylvania. My background is in economics, computer science and psychology. And my research and teaching are all about the peculiar ways that we make decisions, and why our choices aren’t always ideal. I ask questions like, “Why do we so often order pizza when we know we should pick salad? Why do we sit on the couch when we know we should be exercising? And why do we buy shiny new gadgets with money we know we should be saving?” The answers that come back are fascinating, and I can’t wait to share them with you.

 So I want to start this first episode of the season with, well, let’s call it a vignette, from a coffee shop. I want you to imagine yourself in this scene. It’s a little thought experiment. You’ve just ordered a coffee. Let’s say you want caffeine, but not too much. So you’ve ordered a half-caff Americano.

Speaker 2: All right, there you go. One half-caff Americano. That’ll be $3.

Speaker 3: OK.

Speaker 2: I forgot to mention, if you have your own mug, you can save 50 cents.

Speaker 3: Ah, good to know. I don’t have mine with me, but I’ll bring it next time.

Speaker 2: OK, sounds good. So that’ll be $3.

Katy Milkman: That sounds pretty good, right? Too bad you don’t have your own mug with you, but so it goes. OK. Now put yourself in this nearly identical scenario. You order up that coffee again.

Speaker 2: All right. One half-caff Americano. That’ll be $2.50.

Speaker 3: OK.

Speaker 2: I forgot to mention, if you don’t have your own mug, that’ll be an extra 50 cents.

Speaker 3: Oh, really? I don’t have mine with me, but I guess I’ll bring it next time.

Speaker 2: OK, sounds good. So that’ll be $3.

Katy Milkman: Now, of the two scenarios, and remember, the coffee costs exactly the same either way, which one is more likely to inspire you to bring your own mug next time? The one where you save 50 cents off $3, or the one where you pay an extra 50 cents on $2.50? Now, hold that thought. We’re going to examine what it is that makes you prefer one over the other in a bit.

This is Choiceology, an original podcast from Charles Schwab. It’s a show about decisions, big ones and small ones, along with the subtle biases that affect those decisions. We guide you through a world of hidden psychological forces that influence everything from your coffee budget to medical cover-ups to how well Tiger Woods performs on the putting green. And we do it all to help you avoid costly mistakes.

This first story is emotionally intense. If you have young kids, like I do, this may be particularly wrenching, but the story illustrates a bias that we all face from time to time. It also demonstrates the courage and resilience of one man who has been fighting for the truth for the last 28 years.

Will Powell: My name is Will Powell. I live in Swansea, in South Wales, in the United Kingdom.

Katy Milkman: Will Powell is a father to three boys. His youngest boy, Robbie …

Will Powell: Ah, Robbie was a character. He would call different friends and ask them for sweets, and ask them to tell him jokes. And he liked to sometimes help me around the house when I was renovating. He also was excited when we used to go fishing together.

Katy Milkman: Robbie was a typical kid, healthy, active, fun. He was nine, going on 10 years old. But in December of 1989, Robbie fell ill and was rushed to the hospital.

Will Powell: Well, I actually was out playing darts with my friends that evening. My wife accompanied Robbie to the hospital, in an ambulance. I was contacted immediately, and I came from where I was to the hospital, and Robert looked as if he was going to die. I actually cried over his bed, and several tests were done. We were never told the results of those tests, but we were told he almost died.

Katy Milkman: Robbie was in the hospital for four days. He lost a third of his body weight.

Will Powell: He was ill for some weeks after he was discharged. He actually had to see a GP two days after discharge, because he wasn’t eating.

Katy Milkman: That GP Will is talking about is a general practitioner, a family doctor, basically. Robbie had seen various GPs at his local health center and several pediatricians at the hospital. The back and forth between these two groups of doctors is important to the story. As Will mentioned, Robbie was sick for some time after his first hospital visit. It was a slow recovery, but he finally began to put on some weight. Unfortunately, a few months later …

Will Powell: In April of 1990, Robbie fell ill again. He became lethargic and he had a sore throat, so I decided to take him down to the health center to see a general practitioner, a GP. He examined Robbie, said he could find nothing wrong, and didn’t read the child’s medical records.

Katy Milkman: That’s a key point. The health center doctor didn’t read Robbie’s medical records from his first hospital visit. You see, there was a clue in those records. Pediatricians at the hospital had proposed a diagnosis, but that information was missed. It was a simple mistake, but one that would have major consequences. Later, while Robbie’s mother was caring for him at home …

Will Powell: As his mother was helping him into the bathroom, he slipped through her arms and fainted. She immediately screamed. I went upstairs. Seen Robbie was unconscious, come downstairs, telephoned the GP practice, saying it’s an emergency, that our 10-year-old son had fainted, and that we needed a doctor straight away. I put Robbie in the car, drove straight to the hospital, which is approximately 12 miles from my home. When I carried Robbie into the hospital, as I lay him in the bed, he’d stopped breathing. I shouted, “Robbie, Robbie.” And there was no response, his eyes were fixed in the back of his head, and his mouth was wide open. I was told to leave the room.

Katy Milkman: Robbie Powell was pronounced dead shortly after. Horrifying, every parent’s worst nightmare. Even more heartbreaking, Robbie’s death was preventable. The pediatricians who examined Robbie during his first visit to the hospital had suspected Addison’s disease, which is an endocrine disorder. They recorded this potential diagnosis in his patient records, but, crucially, they neglected to mention it to Robbie’s parents.

Will Powell: And it’s important for your listeners to understand, Addison’s disease invariably results in death without treatment. However, it’s treatable, and the patient who’s treated can live a full and normal life.

Katy Milkman: It hurts immensely to hear about a preventable death, particularly one involving a young child. I cried when I first heard this story, because I couldn’t help picturing my beautiful two-and-a-half-year-old son on that hospital table. But the reality is that doctors are human, and they make errors that sometimes result in people dying. It’s entirely likely that those same doctors made many life-saving decisions during the same period. But this story becomes unique in the aftermath of Robbie’s death. It’s complicated, and we can’t explore every detail, but the chain of events that followed would consume Will Powell for the next 28 years.

A coroner’s report confirmed Addison’s disease as the cause of Robbie Powell’s death. One of the doctors from the health center came to Will’s house to discuss the findings.

Will Powell: And he had with him Robert’s medical records. I asked to see them. I was absolutely devastated to learn that a document was in there that says, “Needs ACTH test, parents informed.” I said, “What the hell’s this test? We know nothing about it.”

Katy Milkman: An ACTH test measures the patient’s response to a specific hormone. It’s used to diagnose Addison’s disease. If someone had done this test, it could have saved Robbie’s life.

Will Powell: The documents were in the records, clearly instructed the doctors to get Robbie straight back to hospital if he became unwell.

Katy Milkman: The thing is, Robbie had been seen by five doctors from the health center on seven separate occasions over the previous 15 days. So what happened? Why was this crucial information missed?

Will Powell: Well, what I found out after Robbie’s death was that all the GPs, save for one, never read the medical records.

Katy Milkman: Four of the five doctors who had seen Robbie neglected to read his medical records. That’s a big deal. Will Powell asked the health center to investigate what happened.

Will Powell: Robbie died on the 17th of April, 1990. On the 30th of April, just 13 days later, I made a formal complaint. I asked for copies of Robert’s medical records. They were refused, but in November 1990 I received a copy of the GP and the hospital records.

Katy Milkman: What he found next was stunning.

Will Powell: Well, when I received the medical records, I was fully aware there was now a cover-up between the doctors at the health center and the pediatricians at the hospital. They had falsified Robert’s records and removed the suspicion of Addison’s disease.

Katy Milkman: The records had been changed. Documents had been falsified. There was even evidence of secret phone calls and a meeting between the doctors involved. Why would the people charged with Robbie’s care do this? It’s clear that mistakes were made, so why not try to identify them and understand why they happened? At worst, one or more of the doctors might have faced discipline, or perhaps a malpractice charge, but in the U.K. in the 1990s, the payout for malpractice was small, particularly compared to what doctors might face in the U.S.

Will Powell: Back in those days, in 1990, in the U.K., the death for a child through negligence of a doctor was £3,500, with £1,500 for the funeral. So it was approximately £5,000.

Katy Milkman: That would have been about $10,000 at the time. Here’s where the story gets crazy. The doctors and the clinic and the health authority spent 14 years fighting multiple investigations, and spent hundreds of thousands of pounds. (You can roughly double that to get the dollar amount at the time.) All this to avoid about $10,000 in compensation.

Will Powell: I don’t believe doctors spent hundreds of thousands of pounds covering this up through the courts because of the financial penalty. They did it to protect their reputations.

Katy Milkman: All this time, all this money, all this heartache. This doesn’t seem to make sense. The hospital eventually admitted negligence in Robbie’s death, but none of the doctors ever did. This, despite independent expert analysis showing four out of the five GPs and one of the pediatricians who saw Robbie were negligent.

Will Powell: Nothing was going to bring Robbie back. We never thought for one minute that what had happened had been intentional. These doctors, in my view, were grossly negligent. But if they’d been honest, told the truth, not falsified the records, accepted whatever sanctions they should have had because of their failures, my wife and I would have walked away from it. We wouldn’t have sued them.

Katy Milkman: Instead, Will endured 14 years of hearings and court dates and reports. He faced seemingly endless stonewalling from the doctors and their lawyers. He wrote hundreds of letters to politicians and health authorities and the police in search of the truth.

Will Powell: All we wanted was the truth, an acceptance that our little boy should never have died. However, when they falsified the records, called my wife and I liars, put us through hell and back, because of their dishonesty, I now want justice. I want the truth and I want accountability.

Katy Milkman: Will’s efforts did eventually lead to legislation in the U.K., called the Duty of Candor, or Robbie’s Law, which imposes improved reporting rules on health authorities. While it doesn’t go as far as Will would like, it’s a move in the right direction.

Now, we didn’t bring you this story as an indictment of doctors in general. Not at all. Doctors work in an incredible difficult and complex field, and personally I’m a huge admirer of the commitment they make to helping others. It’s an amazing thing. But because doctors are human, they make mistakes just like the rest of us, and they have more opportunities than most of us to make mistakes in life-or-death situations. In the case of Robbie Powell, those mistakes had tragic consequences.

But here’s the big-picture question. Why would those doctors and their lawyers spend 14 years and a fortune in resources to try to hide their mistakes? Why not just own up and apologize? There’s evidence that patients and their families are much less likely to sue when medical practitioners tell the truth and apologize for their mistakes. When it’s employed, that kind of transparency actually saves the health system time and money. Even if admitting their mistakes had cost the system or the doctors $10,000, this story would have ended 14 years earlier. But they fought and schemed and covered up and fought some more. Why?

What is it about people, not just doctors, but people, that makes us sometimes willing to do anything, to stall or cheat or hide, in order to avoid a loss of reputation? Well, it has something to do with the way we view losses in general. We hate them, and there’s evidence we’ll go well out of our way to avoid locking them in. Research shows that people are roughly twice as motivated to avoid a loss as they are by the prospect of gaining the same amount. Another way of saying this is that losing something feels roughly twice as bad as a positive outcome feels good. We can’t really measure this bias in a story like Will Powell’s, but researchers can isolate it. We call it loss aversion, and it was first noted by Amos Tversky and Daniel Kahneman back in the 1970s. The key insight they shared then—losses loom larger than gains.

Dolly Chugh is a professor at NYU’s Stern School. She and her co-author, Molly Kern, have done some great research linking loss aversion to unethical behavior. Of course, most of us would prefer not to behave unethically—and are generally unlikely to do so for gain. But it turns out, we’re far more motivated to cheat when there’s a risk of losing something, like your reputation.

I’ve got Dolly on the line from her office at NYU. Hi, Dolly.

Dolly Chugh: Hi, Katy. Thanks for having me.

Katy Milkman: Thanks so much for joining. Could you give us a little sense of how loss aversion affects behavior when it comes to ethics?

Dolly Chugh: Absolutely. Molly Kern and I were interested in how people respond to identical situations, when they then have to make a choice that could involve lying or cheating, or negotiating with some less ethical tactics. We know that people feel the pain more of a loss than they do of a gain, and so we were interested in, when they face similar losses versus gains, do they take the higher road or a lower road? And what we did find is that people are more likely to take the lower-road ethical choice when they are facing a potential loss than when they are facing a potential gain.

Katy Milkman: So how does this affect decisions in the real world?

Dolly Chugh: What happens in the real world is that we’re often facing situations with uncertain outcomes. Will we get a job, or won’t we? Will we get a sale, or won’t we? Will we get the customer, or won’t we? And in each of those situations, with an uncertain outcome, we’d intuitively do some sort of calculation of what our odds are. The question that raises for us is, how can we talk to ourselves about those odds in a way that’s going to encourage us to take the high road, rather than the low road? So rather than focusing on all the ways in which something might not work out—“I might not get the job, I might not get the sale”—we could focus on the odds of getting it, even if those odds are low. So even if the odds are 10% chance of getting the job, we are likely to match our behavior to our own ethical standards in that scenario, more likely to than if we focus on the 90% chance of not getting the job.

Katy Milkman: So in the case of Robbie Powell’s story, we saw doctors who seemed focused on the loss of reputation, which may have led to unethical behavior. But maybe, if acknowledging those mistakes had been framed as a gain for the medical professional, a way to improve systems and reduce preventable deaths, the doctors might have behaved differently?

Dolly Chugh: Yeah, I think that’s right, and I think so, this is again … I can’t back this up with actual studies, but my guess is that, because we (A) feel losses more than gains and (B) are not good predictors of how we’re going to feel when a loss comes, this is going to lead to a huge overreaction. And this is where we potentially go into the gray area, or even beyond the gray area, of what we would normally consider appropriate behavior for ourselves.

Katy Milkman: So interesting. Thank you, Dolly.

Dolly Chugh: It was wonderful to be here. Thank you for having me.

Katy Milkman: Dolly Chugh is a professor at New York University’s Stern School of Business and the author of The Person You Mean to Be: How Good People Fight Bias.

We see this overreaction, as Dolly called it, in different areas. In politics, entertainment and business, there are lots of examples where people hide minor transgressions with major cover-ups. And it may help explain the seemingly irrational choices made by the doctors in our story about Robbie Powell. But we’re going to step out of the ethics domain now, and into the world of professional golf.

Hank Haney: I don’t think there’s ever been a bigger putt than the putt that Tiger made on the 72nd hole at the U.S. Open in 2008. He needed that 20-, 25-foot putt to tie with Rocco Mediate, to go into a playoff the next day. And somehow he made that putt. I think that’s the biggest one that stands out in my mind, for sure.

Hi, I’m Hank Haney, PGA teaching professional, and for six years I was lucky enough to work with Tiger Woods, the number one player in the world at the time. It was one of the greatest experiences a coach could ever have.

Katy Milkman: How does loss aversion figure into golf, beyond the fact that no athlete likes to lose? Well, Hank Haney has noticed a peculiar tendency that many golfers have when they’re putting.

Hank Haney: Yeah, one of the interesting phenomenons is that players typically are much better putters for par than they are for birdie, even though it’s just a putt. It should be the exact same thought process, but it’s one of those things that’s very difficult to explain in golf, where people are better par putters than they are birdie putters. I don’t know if I have an explanation for it, to be honest with you.

Katy Milkman: Well, we have an explanation, but we’ll get to that in a bit. For now, what Hank is saying is that, in his experience, golfers are more accurate and more successful when shooting for par than for birdie. If you don’t know golf, par is basically a reference point, the number of strokes it should take you to get the ball in the hole. You shoot one stroke under par, that’s a birdie. Yay. One stroke over par, that’s a bogey. Boo. The thing is, the reference point of par is just for that one hole, not your final score, the thing that actually determines if you win or lose.

Hank Haney: When you’re putting for par or birdie, the thought process in your mind is, “If I miss this par putt, I’m going to drop a shot. If I make this birdie putt, I’m going to gain a shot.” It’s still just a shot, but there’s something different about losing versus gaining, and when people have this thought in their mind, that they’re getting ready to lose something, they act a little different and they react a little bit different, as opposed to gaining something.

Katy Milkman: Hank saw this kind of behavior even in the best golfers.

Hank Haney: Tiger Woods was the absolute perfect example of being a better par putter than birdie putter. Now, he was a great birdie putter too, but, boy, oh boy, if there was a putt to avoid making a bogey, or a putt to avoid making a double bogey, he was even better than normal on those putts. Absolutely, 100%, Tiger Woods was very loss averse when it came to putting, no doubt about it.

Katy Milkman: Hank Haney believes Tiger Woods is loss averse when he putts. But that evidence is still anecdotal. Let’s get scientific. Two colleagues of mine, Maurice Schweitzer and Devin Pope, wrote a research paper called “Is Tiger Woods Loss Averse?” in which they analyzed millions of putts by professional golfers and noticed something interesting. Players really do seem to experience loss aversion on the putting green, and the phenomenon costs them hundreds of thousands of dollars in potential winnings.

I grabbed Maurice Schweitzer from down the hall here at the Wharton School to get his perspective. He’s a fellow professor in my department. Hi, Maurice.

Maurice Schwweitzer: Thanks for having me.

Katy Milkman: Thanks for being here. So we just heard famed golf coach Hank Haney observing what he believed to be loss aversion on the putting green, but how do you actually measure it on the golf course? You can’t peer into the mind of a pro golfer when he or she is making a putt, right?

Maurice Schwweitzer: You can’t actually peer into their minds. What you may not know is that, on the PGA Tour, they have vans that drive around, and they laser-tag every ball after every shot. So you have the X, Y, Z coordinates, the coordinates in space, of every ball after every shot, so you can track each shot of every player throughout the tour. When you’re playing professional golf, each hole gets a score. Not only does it get a score, but there’s a par for each hole, and on the score card you literally draw a circle around the scores that are below par and a square on the holes that are above par. So that is … we can think about, “I just shot hole number nine, was I above or below par on that hole?” The idea is that, because of loss aversion, we might value things differently. We might make different decisions, different choices because of how we’re experiencing a loss or a gain.

Katy Milkman: So how do these reference points—birdie, par and bogey—affect a player’s performance?

Maurice Schwweitzer: What we’ve found is that, on average, if these top golfers had hit their birdie putts as accurately as they were hitting their par putts, they would improve their score by about one stroke across the 72 holes. And that might not seem like a lot, but we estimated the increased winnings that these golfers would earn and, for these top golfers, this turned into hundreds of thousands of dollars. This is a very expensive mistake that they’re making, and in our data set we analyzed about two-and-a-half million putts, made between 2004 and 2009. So is Tiger Woods loss averse? We find that he is. But it’s not just Tiger Woods, it’s all these golfers.

Katy Milkman: I love this research, Maurice. Thank you so much.

Maurice Schwweitzer: It was great to talk to you.

Katy Milkman: Maurice Schweitzer and his collaborator Devin Pope looked at putting data in aggregate. Millions of putts, analyzed over a period of time. And they found that pro golfers were losing hundreds of thousands of dollars because of this tendency. How should golfers deal with this problem? Here’s Hank Haney again.

Hank Haney: The way you play better golf, obviously, is, you really don’t keep score at all. You just try to play your best on every single shot, and then you add up the score at the end.

Katy Milkman: I’m Katy Milkman, and this is Choiceology, an original podcast from Charles Schwab. If you want to get a sense of how loss aversion and other biases can affect your finances, our sister podcast, Financial Decoder, is coming soon. It’s hosted by Mark Riepe, head of the Schwab Center for Financial Research, and it was created specifically for listeners who want to learn about making better choices with their money. In each episode, Mark will look at a different financial decision, some large, some small, and the forces that might prevent you from choosing wisely. You can find it at Schwab.com/financialdecoder, or wherever you get your podcasts.

You might be wondering at this point how these examples might help you prevent loss aversion from negatively affecting your own decisions. As you’ve probably guessed, it’s tough to counter. Like a lot of the biases we’ve looked at on the show, this one is hardwired. It turns out that knowing you’re susceptible to a bias hasn’t been proven to help much. And quite frankly, sometimes loss aversion can be a good thing. It might help you keep working towards a difficult goal, or committed to a rocky relationship that’s worth saving. But it can get in the way of making the best decisions.

So if awareness isn’t enough to counter our loss aversion, what can you do? Well, one option is to take a step back when you’re making big choices, and check for what I’d call framing errors. What is a framing error? Well, let’s go back to the coffee example at the start of the episode. You could tell, right, that there was something extra annoying about expecting to pay $2.50 for a coffee, and then finding out it would be $3 since you hadn’t brought your mug. It just felt different than expecting to pay $3 and learning how you could have gotten a 50-cent discount. It felt worse.

That’s a simple framing switch. And research shows they really matter. For instance, Tatiana Homonoff, an economist at NYU, showed that when grocery stores charge you a nickel for a plastic bag, you’re far more likely to bring your own bag than when they give you a nickel discount to bring your own, even though it’s the same thing. But what about when the stakes are higher than a nickel? Maybe, like the golfers Hank Haney and Maurice Schweitzer talked about, it might simply be a matter of changing the way you keep score. Here are two things you can try to improve your decisions. The first is to rewrite the script for yourself, to figure out if you’d make the same choices in the face of both gains and losses.

Imagine you purchased a bottle of wine years ago, and the price has since skyrocketed. Your spouse suggests you sell it at auction, so you can take a nice vacation, but you can’t bear to part with that prized bottle. Ask yourself this. Would you buy the wine now, at its current sale price? If the answer is no, loss aversion may be at play. You’re unwilling to give up or lose the bottle, even though you don’t value it enough to buy it again. That doesn’t make sense, but that’s loss aversion. If, on the other hand, you would buy the wine again at its current price, then it isn’t loss aversion. You aren’t making a mistake, but you should drink the wine.

I said I’d give you two tricks. The first is to reframe, and the second is to broaden the frame. Just as the golfer would be less panicked about a single putt in most cases, if she focused not on par for the hole, but par for the course, you can also reduce the power of loss aversion if you expand your frame of reference. Maybe you’re afraid to take a risk because of what you stand to lose, even though it has a huge upside. But if presented with that same bet hundreds of times, it would feel like a no-brainer. Remind yourself of this when making any single decision. Ask yourself, “Would I make the same choice if I were doing this 100 times?” And, if it is the kind of decision you’ll make 100 times, and not a huge life decision you only get to make a few times, like who to marry or which house to buy, this will help you choose more wisely.

I can’t help but wonder if reframing or expanding the frame might have changed the story of Will Powell’s epic struggle for truth and accountability. If Robbie’s doctors had felt comfortable, or compelled, to own up to their errors, things might have been different. If they’d framed the tragedy of Robbie’s death as an opportunity to improve systems and communication, maybe they could have spared Will Powell and his family those 14 years of anguish. Maybe they could have saved hundreds of thousands of dollars—and helped prevent future tragedies. Those would have been big gains, but they’re hard to see when you’re primarily focused on losing your reputation. Our best defense against loss aversion is to try reframing situations where we face losses, so we also think about the gains. Rewrite the script, or change the way you keep score, so you can see your situation in the most objective way.

You’ve been listening to Choiceology, an original podcast from Charles Schwab. If you’ve enjoyed the show, leave us a review on Apple Podcasts. It helps other people find the show. And while you’re there, you can subscribe for free. Same goes for other podcasting apps. Subscribe, and you won’t miss an episode. Next time on the show, another psychological effect that influences the way you deal with temptation. I’m Katy Milkman. Talk to you next time.

Speaker 8: For important disclosures, see the show notes or visit Schwab.com/podcast.

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