Your decisions are affected by memories and the desire to avoid loss
As we’ve seen earlier, simple evaluations of a situation are the work of System 1, while careful assessment and comparison are the work of System 2.
There are two selves:
- The experiencing self
- The remembering self
The remembering self is associated with System 1, as it automatically forms memories, while the experiencing self represents System 2, which rules our conscious thinking.
These two selves work hand in hand when it comes to making decisions. The experiencing self helps you decide whether you like an experience, and the remembering self focuses on your reaction when you first encounter it. People tend to disregard the backgrounds and focus on memories, which may not accurately represent the reality of what happened and may lead to flawed decisions.
Your memory doesn’t care about the duration of the event. It only focuses on your feelings. For instance, imagine you went on a trip with your friends. You had lots of fun, discovered new places, and felt blissful. But then, as you were walking around the city, someone pushed you to the ground and stole your phone. You felt angry, frustrated, and sad.
Even though the whole trip before that moment was perfect, the intense feelings you got during that one negative occurrence tainted your memories.
⚡️Regardless of how recent, your personal experiences and memories are only somewhat reliable in decision-making.
Regarding taking a risk and examining loss, we always look for the safest bet regardless of the probable outcome. When it comes to gambling, you are unwilling to take risks, because when the probability of a loss is higher than that of a win, you instinctively want to avoid it. Humans are always more particular about avoiding losses than working hard to secure gains. As long as there is a chance for a loss, the brain begins working toward avoiding it.
Adopting risk policies to guard against loss is helpful, but it’s not good to exaggerate it. See a decision as one of the numerous options available to you. Don’t automatically dismiss an option because it contains potential loss.
Since rewards and punishments mold your reaction and motivate your actions, you should pay attention to them.