October 8th, 2021

Writing and the Law of Loss Aversion

by Jenny Hansen

I was just introduced to the Law of Loss Aversion on the marketing side of my life and was shocked at how much I see it in action in the writing world.

What exactly is the Law of Loss Aversion?

It describes the very human foible that we feel loss more than we feel gain. Researchers have proved that you will spend more emotion on a $100 loss than you will on a $100 windfall. In other words, a real (or even a potential) loss will be more severe emotionally than an equivalent gain.

The two researchers who defined this theory, Amos Tversky and Daniel Kahneman, actually showed that losses carry more than twice the psychological impact of gains. So it would be common for a person to feel an equal amount of contentment between not losing $5 and finding $10 on the street.

Loss Aversion is why gambling is so seductive. Marketers and casinos know you can’t deal with the pain of losing out on an opportunity. This is also why "10% off for today only" or "6 hours left" are successful marketing strategies.

Bottom Line: We hate losses even more than we love gains.

It's not completely rational, but it's true. Here's Loss Aversion in action:

Managing Loss in Writing

Writing is a profession where we're required to accept loss as an intrinsic part of our jobs. We fight an uphill battle all the time, in my humble opinion. Writing is about heart and vision and drive. On the other hand, the Business of Writing is about numbers and sales and distribution.

We bring heart and emotion to our work. We have to, or the stories will suck. Or worse, they won't get written.

Yet the selling of our work is in many ways heartless by nature. Emotion has no place in numbers - you're either selling or you aren't. Marketing metrics are pretty black and white.

What do writing losses look like?

The losses writers endure can feel endless - like a thousand paper cuts in any given year. Some losses may feel smaller or larger, but all of the items below are usually perceived as losses.

  • Rejection from an agent or editor
  • Edits requiring you to change an entire story
  • Not finaling in a contest
  • Losing your manuscript with no backup
  • Losing a critique partner
  • Missing an important deadline
  • Bad reviews
  • Not having a contract renewed
  • Your main contact leaving (ex: publishers, marketing firms, publicists)

What do our writing wins look like?

And just when we think about quitting...a "win" comes rolling in. They might look like:

  • Acceptance from an agent or editor
  • Edits showing that your [fill in the blank] loves your story
  • Finaling in a contest
  • Gaining a great critique partner
  • A great review
  • Getting a contract renewed
  • Winning an award
  • Making a "best of" list

How do you manage Loss Aversion?

So, if it's human nature to fear loss more strongly than we embrace joy, how do we keep ourselves motivated in a profession that guarantees loss? How do we fight against being more bummed out about a bad review than feeling joy over a good review?

In his Medium article, How Loss Aversion is Driving Your Fear of Failure, Daniel Schleien gives five solid tips about how to overcome loss aversion:

1. Be grateful.

Last year in our annual post on Writerly Thanks, I shared a quote from a conference I attended called LIFT:

"Gratitude lives in the same part of the brain as fear. You can’t feel both at the same time."

- Danny Iny

Especially amid a pandemic that included homeschooling (*shudders*), I badly needed Danny's advice. And I needed to read that there's neuroscience backing up those claims that a practice of gratitude actually rewires the brain.

Essentially, focusing on the things you're grateful for leaves less room in your brain for fear and angst.

2. Think long-term.

Lists help with this. Gratitude journals. Reminders on the mirror. Anything that makes you remember your wins will help keep your long-term goal-thinking more rational. If the losses take up twice as much of your energy, a review of your wins and a list of what you love about your work-in-progress will always save your writing day.

Stop being afraid of what could go wrong and start being excited of what could go right.

- Tony Robbins

3. Be honest about what could actually go wrong.

What is the worst thing that could happen? Seriously. If the positives aren't keeping you on track, take a moment to make a list of what could go wrong, and a plan for how to deal with it. Thinking about the fear of failure logically (when you aren't in the middle of a deadline) can help with the fear.

4. Create a strong information filter.

Stop letting all the negative news and information into your brain. Colleen Story calls this "doomscrolling." She did a terrific post about it earlier this year and offered amazing suggestions to help you keep your writing creativity strong. Seriously, set some Google alerts, curate some lists, and be selective about what you let into your writing brain.

5. Read books. Especially biographies.

Read books that make you happy, but also read books about people overcoming hardship. Memoirs and biographies are amazing for this. Kind of the "other people have faced this and I can face it too" mentality.

Pretty great advice, right? Seriously, read Schleien's Medium article. I took his 5 main points and riffed with them, but I really love the language and examples he used.

Final Thoughts

This is a glorious profession we've chosen, but the potential for loss is high and the fear of loss is real. I encourage you to be brave. Gain enough knowledge to have good craft, and then get out of the way and let your magical writing brain tell the story. Be selective in what you allow into that magical writing brain.

Most important of all, be compassionate toward that playful creative who lives inside you. If you care for your inner creative, they won't let you down.

Do you see the Law of Loss Aversion in action in your own life? How about in your writing? Do you have recent losses or wins that came to mind while you read this? Please share them with us down in the comments!

*  *  *  *  *  *

About Jenny

By day, Jenny provides corporate communications and LinkedIn advice for professional services firms. By night she writes humor, memoir, women’s fiction, and short stories. After 20 years as a corporate trainer, she’s delighted to sit down while she works.

When she’s not at her personal blog, More Cowbell, Jenny can be found on Facebook at JennyHansenAuthor or at Writers In The Storm.

Top Photo from Depositphotos by Vadim Vasenin

28 responses to “Writing and the Law of Loss Aversion”

  1. Thanks for the timely reminders, and the numbers. I hadn't realized it was that specific.

    Negative emotions hit when they can do the most damage (one of Murphy's corollaries): I'm getting very close to the end - the explosive end - of Book 2 of my mainstream trilogy.

    I worry about turning off my few fans - and then I realize if I have that much impact, I'll gain even more in new fans (I'm not doing any of the 'forbidden' things, just letting a natural consequence rear its shaggy head.

    So, if you're going to experience negative emotions such as fear, get that gratitude in there immediately and proactively and with some enthusiasm. Right away. Tackle fear (I do it in writing in my journal) and talk back to it and don't let it take residence in your brain.

    If the fear is legitimate - you really need to do a better job on, say, fight scenes - tackle that head on and LEARN. Fear lies - it says you can't learn. Ha!

    • Jenny Hansen says:

      I absolutely agree that Fear is the biggest liar in town. It's right up there with hormones. 🙂

      I'm so excited for you that you're getting to the end of Book 2. The End is always enormously rewarding, and you have overcome large obstacles to get there.

      • And thank YOU for the topic of loss aversion. It explains a lot of things, including, possibly, vaccine aversion, which has been making me wonder about humans since the pandemic began.

        A trait which increases survival in humans as it does needs to be known, and carefully evaluated for its current value, when there are already too many humans. I have learned a lot about Fear, and Resistance, from Steven Pressfield's books such as Do the Work and The Art of War, so I have developed ways of coping with fear during writing, but it didn't occur to me until now to think of its survival value in quite this way. 'Know thyself' has many parts, because many of these unconscious traits really run your life.

  2. V.M.Sang says:

    Everything you say is true. I had a book (not sure where it's gone) that talked about gratitude. Basically, it said not only that if you are grateful for things, and actively say 'thanks' out loud to yourself, the Universe, God, or whatever you believe, good things will come.
    I think this post reinforces that. If you are grateful, you are happy, so negative feelings can't get in. Being positive aids in success. You won't say 'it's a waste of time to enter this contest, send this to an agent, self-publish, advertise my book, etc'.

    • Jenny Hansen says:

      That "thanks out loud" is great advice. I hear more and more about stating positive intentions and the power it brings to our actions.

      p.s. I laughed at your second comment. The math felt slightly wonky, but it's not my strong suit, so I let it go. I love having math-y pals like you to set me straight. LOL.

  3. V.M.Sang says:

    Oh, and in the video, the probability is wrong. You have a 50/50 chance of winning whether you are offered $10 or $20. You have a 50% chance of winning $10 and a 50% chance of losing $10 in the first instance. In the second, you have a 50% chance of winning $20, and a 50% chance of losing $10. The winning and losing probability is the same, regardless of the amounts concerned.

  4. Interesting video! I'd heard of loss aversion before, but I never thought about it in terms of my day-to-day writing. What I do think about is that the overall win of writing these past 5 years has outweighed the losses--job, health--that created that opportunity.

  5. lrtrovi says:

    A "just-in-time" post for me! Very interested in the relation between fear and gratitude. Thanks for the mind re-set.

    • Jenny Hansen says:

      You and I have a great just-in-time synergy going, lrtrovi. Just when I give you a post you need to read, you give back a comment I needed to hear. Big symbiotic high five to us!

  6. Your post today comes at exactly the right time for me. I've certainly practiced loss-aversion, in both life and in my writing, and now that I'm working in a new-to-me-as-a-writer genre, it's easy to see plenty of potential loss ahead, even as there's so much to gain, like writing the stories I feel compelled to write. All of your tips are important--#3 is one I haven't spent time on and will help balance things in my mind. Thank you!

    • Thanks for making me look again at #3 - loss limitation is an important part of dealing with loss aversion, and I hadn't given it proper weight until you mentioned it.

    • Jenny Hansen says:

      Congratulations on the new genre, Dale! And thanks for weighing in. I think a stress-free evaluation of an issue using #3 is valuable because throwing light and logic into the dark closet of fear always makes the fear shrink. I hope you come up with some great what-if scenarios that get you more excited than ever about this new direction. 🙂

  7. Very interesting post, Jenny. I'd heard about loss aversion before but never realized how many things I do to mitigate those feelings. I keep lists and strike off accomplishments daily. I also love to read and write biographies. It surprised me to learn that reading biographies worked that way. Then again, when I think about it, of course they do! Thanks for a great post.

    • Jenny Hansen says:

      Thanks, Lynette. And kudos to you for managing loss aversion so well. I think this is more common amongst people who've experienced loss. It's the only way to keep your spirits up when real loss has marked your life.

  8. Love this, Jenny.. Great advice, and I love your compassion. Lately I've been thinking a lot about writers taking ownership of their own careers. In a business where it seems the artist who creates the "product" has the least control and we're always waiting to be anointed, we can choose to define our success and what fulfills us on our own terms. That's the road to long-term happiness, in my view. I love your practical suggestions for getting there.

    • Jenny Hansen says:

      I love the sound of "writers taking ownership of their careers." The current publishing model seems to put the most important player last a lot of the time. I'm seeing that change with small pubs and self-publishing, but I wish it would change in traditional publishing too.

      And frankly, the model won't change until writers make it change...and I think self-publishing has started to do that.

  9. Barb DeLong says:

    What an insightful post! The whole thing resonated with me on so many levels. I'm a fan of The Secret books and I guess I've always been looking for the happy--gratitude plays a huge part. A zillion years ago I read How to Stop Worrying and Start Living by Dale Carnegie. He espoused your #3: assess the reality, what's the worst that could happen and set up a plan to deal with it; what really might happen and set a plan. Then let that issue go as taken care of. I do that little exercise when faced with a big scary problem and the worry that comes with it. Your post gave me the push to start an accomplishment journal to record all the "wins," large and small, in my writing and elsewhere. Thanks, Jenny!

    • Jenny Hansen says:

      Thanks, Barb! And you've inspired me, with your resolution "to start an accomplishment journal to record all the "wins," large and small. I bought a gratitude journal a while back and I haven't used it. You've inspired me to dig it out and get started!

  10. deleyna says:

    This is a powerful concept, Jenny! Love it! Thanks for sharing.

  11. dholcomb1 says:

    It's not a surprise. It's so easy to fall into wallowing in the misery of things. But, success comes out of the fire of failure, so I must rise and go forward.

    denise

    • Jenny Hansen says:

      I always think of what Julia Roberts' character said in Pretty Woman: "People put you down enough, you start to believe it.. The bad stuff is easier to believe." Writers are usually made, not born, and that negative tape runs through a lot of our heads. However, the strongest iron is forged closest to the fire, and we are freaking warriors!

  12. Jenny, this is a brilliant post. It helped me understand a change I made in genre.

    Jean Jenkins, who edited a historical fiction dark hero's journey for me, died last year. I took this very hard.

    In order to pull myself out of depression over this I decided to write a light-hearted story. That helped.

    I do my best to find something to be grateful for every day.

    • Jenny Hansen says:

      I didn't realize that was the reason for your genre change, Ellen. Maybe you didn't either. But I think that's lovely, and that Jean would love that you are pushing yourself as a writer.

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