Review of The Power of Bad: How the Negativity Effect Rules Us and How We Can Rule It by John Tierney & Roy Baumeister

Loss aversion is one of the central ideas of behavioural economics that has made it into the mainstream. In The Power of Bad, John Tierney and Roy Baumeister broaden their view of loss aversion to look at the many ways that negativity rules our worlds by dominating our attention.

As they point out, there are many more negative than positive emotional words. Trauma has no opposite but is an important experience to understand, especially over the last year and a half. Post-traumatic stress disorder is a serious and debilitating mental health issue. However, studies also show that some people undergo post-traumatic growth (PTG) after such experiences, and in fact this is around three times more likely than PTSD.

One of my overall take outs from the book is the importance of the positivity ratio and the consistency of that number across many different situations. It mirrors the typical ratio found in loss aversion that losses are around 2-3 times more impactful than gains. If your life consists of four good experiences or days for every one bad experience or day, then you are probably thriving!

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