JDChi Deprival-Superreaction Tendency
This skill helps you understand the tendency to react with extreme intensity to even small losses or threatened losses of property, love, friendship, status, or any other valued thing.
Core Concept
The quantity of man's pleasure from a ten-dollar gain does not match the quantity of his displeasure from a ten-dollar loss. The loss hurts much more than the gain helps. Additionally, if a man almost gets something he greatly wants and has it jerked away, he reacts as if he had long owned it.
Key Examples
- Gambling addiction: Passion to "get even" grows with losses; near-misses trigger the tendency
- Sunk costs: Continuing to invest in failing ventures
- Bureaucratic infighting: Defending territory against any reduction
- Berkshire shareholders: Reluctant to sell shares even after massive gains
Consequences
- Irrational escalation in conflicts
- Holding onto losing investments
- Resistance to necessary concessions
- Overpaying at auctions to avoid losing
Antidotes
- Use poker skills: Know when to fold and walk away
- Focus on future, not past: What should you do now, given current reality?
- Avoid auctions: Buffett's rule: "Don't go"
- Recognize the pattern: Awareness helps resist the emotional pull
Application
When using this skill, help the user:
- Recognize when deprivation feelings are driving decisions
- Make rational choices about holding vs. letting go
- Avoid escalation of conflicts based on loss aversion
- Design systems that account for this tendency