article thumbnail

What I Didn’t Know About Becoming a CEO

Harvard Business Review

Of course, I love whenever we outperform our benchmark or peer group, but the pain of underperforming is much more painful than the pleasure of winning the same amount, a phenomenon studied at length by Daniel Kahneman and Amos Tversky. That made a huge impact on me.

CEO 8
article thumbnail

The Business Lessons of the Belmont Stakes

Harvard Business Review

Win or lose, I'll Have Another's situation provides useful lessons about business and markets. Daniel Kahneman , a renowned psychologist who won the Nobel Prize in economics, developed this concept in the 1970s along with his collaborator, Amos Tversky. And it's a lesson you can apply as you consider prices in the market.

Beyer 14
Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

article thumbnail

Your Judgment of Risk Is Compromised

Harvard Business Review

Since then, numerous studies have found evidence of the bias at racetracks and other sports betting markets all around the world. Indeed, it is probably the most discussed empirical regularity in sports gambling markets, and the literature documenting it now runs to well over a hundred scientific papers.

Tversky 11
article thumbnail

Reframe Your Strategy to Avoid Hidden Biases

Harvard Business Review

These biases arise from what Kahneman and his long-time research partner Amos Tversky call framing. The second example of a behavior-distorting objective is marketing's preoccupation with branding. In good part, support for these approaches stems from the psychological appeal they hold for those responsible for strategy and marketing.

article thumbnail

A Case for Group Risk-Taking

Harvard Business Review

I didn’t realize that noted academics Amos Tversky and Daniel Kahneman were studying this exact phenomenon, which they officially named “ loss aversion.”. As a fund manager, I was very aware that the pain of losing money was markedly worse than the satisfaction of gaining an equal amount. What are the potential downsides?

article thumbnail

The Business Lessons of the Belmont Stakes

Harvard Business Review

Win or lose, I'll Have Another's situation provides useful lessons about business and markets. Daniel Kahneman , a renowned psychologist who won the Nobel Prize in economics, developed this concept in the 1970s along with his collaborator, Amos Tversky. And it's a lesson you can apply as you consider prices in the market.

Beyer 10
article thumbnail

The End of Economists' Imperialism

Harvard Business Review

"By almost any market test, economics is the premier social science," Stanford University economist Edward Lazear wrote just over a decade ago. Two years later, in 2002, the co-leader of that invasion, Princeton psychology professor Daniel Kahneman, won an economics Nobel (the other co-leader, Amos Tversky, had died in 1996).

Tversky 12