Hey! Goooodmen. I’m Suke.
I’m eating a dried sweet potato that Suka gave me.
I still can’t get over how excited I am about Japan’s great run in the soccer world cup. After the second goal against Spain, I was really nervous for the last 30 minutes and a bit. It probably shortened my life span.
Next game is tomorrow at 24:00! Go Japan!
The main topic this time is loss aversion, a key word in behavioral economics.
It is the psychology behind the status quo bias, which was also mentioned in yesterday’s upload of “The Courage to be Disliked [Adlerian Psychology].
お疲れ様です。 電車の中で、腹痛に耐えています。GoooodmenのSukeです。（あと20分） 今回は最近読みました『嫌われる勇気』という本について紹介します。 『嫌われる勇気』は岸見一郎と古賀史健の共著による、アルフ[…]
Loss aversion is a property of prospect theory proposed by Daniel Kahneman and Amas Tversky in 1979, which states that we tend to view losses as more important than gains.
In the article I uploaded, I used the analogy of how much you would participate in a game in which you lose a million yen if you lose, as long as the reward for winning is the same.
In this theory, it seems that many people would answer that they would participate in the game for roughly 2 to 2.5 million yen.
The value of 1 million yen that you might lose is the same value as the 2 to 2.5 million yen that you might gain.
We have seen an example of this characteristic being put to good use in our own neighborhood, and we would like to share it with you.
Which is better?
“(1) a system where you get paid more if you acquire skills” vs. “(2) a system where you get paid less if you don’t have enough skills”
It’s quite a difficult question, isn’t it?
Well, of course, I think there are other backgrounds involved.
If I were to think of other backgrounds today, I would say working hours.
Labor standards are becoming stricter, and if anyone is forced to work overtime, he or she will be prosecuted.
Jobs are now available on time, and it is considered wonderful to have no overtime work.
From a manager’s point of view, the people you want are those who can work within regular hours with a high level of productivity.
If you were a manager, which system would you use to hire people?
What comes into play here is the psychological property of loss aversion in workers.
For example, a company has a rule that says you must not work overtime.
(1) A job with an annual salary of 3 million yen. The condition is that the annual salary will be 3.6 million yen if the employee performs 10 jobs during regular hours and is able to do 2 additional jobs in addition to the 10 jobs.
(2) A job offer of 3.6 million yen per year. If the employee can do only 10 jobs, the annual salary will be reduced to 3,000,000 yen.
Which do you think would make the employee work harder to finish the 12 jobs on time?
After all, people don’t like to be paid less.
It is said that people will work harder if (2).
If you are a manager or a worker, it would be interesting to know which condition makes you work hardest.
Psychology is very interesting, so I might study it some more.
See you later!
Have a good next week.