#210 Psychological Value

The full question for the record is “How Can I increase the Psychological Value of Everything I Do?

I would argue that this is one of the most important questions about the human experience that we can never fully answer. Daniel Kahmann, Amos Tversky, Richard Thaler, Robert Cialdini and so many others have shown beyond doubt that we are not rational beings and that we do not see the world in an objective manner.

Instead, our thinking process is mostly emotional, and we value what we see differently depending on the story we tell about it. Value is therefore not intrinsic but rather created based on the context.

Classic Experiment

A classic example is an experiment conducted by Richard Thaler that demonstrates how context can change the psychological value of time and money. In other words, people’s perception of the value of money is influenced by the context in which they make their spending decisions.

Thaler asked participants to imagine they were going to the movies and had two scenarios:

  • Scenario A: The participant had decided to buy a $10 ticket. Upon arriving, they realized they lost a $10 bill on the way. In this scenario, 88% of the participants said they would still buy the $10 ticket.
  • Scenario B: The participant had decided to buy a $10 ticket. Upon arriving, they realized they lost the $10 ticket they had already purchased. In this scenario, only 46% of the participants said they would buy another $10 ticket.

Although both scenarios involve a loss of $10, participants were more likely to buy a ticket in Scenario A (losing the $10 bill) than in Scenario B (losing the already purchased ticket). This means that the psychological value of the experience was impacted more by the form of the loss (money v. ticket) than the actual loss.

The framing is therefore all important and the more aware we are of how we are framing a situation the better chance we have of making the most of a situation.

The question for all of us is how can we hack this in-built value perception system to increase the psychological value of everything we do?

Question in the Image:

  • How can I increase the psychological value of everything I do?

Want to Read More Around This Topic?

Nurturing Curiosity – Daily Practice: This is part of the Nurturing Curiosity series of tools, insights and questions designed to help nurture curiosity as part of our daily practice. In point of fact, every interaction we have is an opportunity to question what we are observing and how we and others are seeing the world. Also remember that questions come in many forms throughout our day – as I pour a cup of tea I am asked “How can I make this the best cup of tea I have ever had?” Obviously, this is not purely objective – the tea may be hand-picked and organic, served at the right temperature into a perfectly scalded cup with just the right amount of milk but if it is the 2nd cup of tea it is not likely to hit the mark in the same way as the first cup on a really sunny (or cold) day. So, what else is going on? How can you hack your perception to create exceptional experiences each and every time?

About Tom O’Leary

I coach, mentor and teach high performers to thrive by focusing on the choices we make.

In truth, our paths in life are paved by those choices. We can talk all day but to make our lot better we need to make the smartest decisions and then execute on them as best possible.

My view is that it is about slowing down to speed up. This means spending time being curious and contemplating what might be possible so that when we take action, we can bring all our energy and power to bear.

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