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It's a bias related to money and it describes how investors hold on tight to losing assets. The driving force behind this behavior is our fear of regret.
It shows we are very hesitant to sell an asset at a loss and we tend to hang on to it as it keeps dropping in value, hoping it will pick up again.
When starting new projects, we tend to have high expectations of them doing well. We put a big amount of effort into them and even if see they don't go that well, we still choose not to opt-out. Instead, we hang on them longer, because we feel regret of leaving a project before it materializes.
We therefore fall into the trap of irrationally hanging on to it in order to avoid regret temporarily.
Too many people hang on to relationships that they well know are going nowhere.
Ending a relationship puts us in the situation to admit we have made a mistake and it makes us experience regret. So to avoid regret, we convince ourselves that as we have come so far with the relationship, we should give it another chance, despite knowing there hardly is any hope.
Brain imaging helped identify the neural circuits that are involved when we feel regret.
A substantial activity is taking place in the hippocampus, which is responsible for memory. Also, experiencing regret and being scared of feeling regret involve very similar neural circuits – indicating that fearing regret is actually practically the same as experiencing regret.
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Recognizing that failure is healthy and a normal consequence of working in a complex environment can help us look at failure as a learning process instead of dreading it. It also helps to let your failure(s) be out in the open, making them visible to yourself and others.
A public failure is a learning for all, as they learn to make errors and take ownership of their mistakes. Openly admitting your mistakes also sends out a strong message of your being courageous, humble and bold.
Many mission-critical work environments report errors and mistakes on time. This is because the employees are allowed to commit and share mistakes, and report them without fearing that they will be sacked. This psychological safety is crucial to a healthy work environment.
It helps to know that failing is an inevitable part of our complicated working life, and aids our lifelong learning.
Status quo bias is when we prefer that our environment and situation should remain unchanged.
The bias has the most impact in the area of decision-making, as we tend to pre...
These explanations are all irrational for preferring the status quo: