Setting Loss Limits for Better Decision Making

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Human decision making is prone to errors, and individuals are often faced with challenging decisions, especially when dealing with losses. To improve decision making, it can be helpful to plan in advance how to avoid temptations or make better choices. One effective strategy is to set loss limits, which preemptively determine a point at which to stop and reassess the situation. By establishing these limits ahead of time, individuals acknowledge their potential for poor decision making in the heat of the moment and take proactive steps to mitigate it.

I recently sat down for a live event and Q&A with the great Annie Duke to discuss her new book, Quit: The power of knowing when to walk away. This episode is the audio from that event. Quit is all about how to develop a very particular skill: how to train your brain to make it easier to know which goals and plans are worth sticking to and which are not.

In Quit, Duke teaches you how to get good at quitting. Drawing on stories from elite athletes like Mount Everest climbers, founders of leading companies like Stewart Butterfield, the CEO of Slack, and top entertainers like Dave Chappelle, Duke explains why quitting is integral to success, as well as strategies for determining when to hold em, and when to fold em, that will save you time, energy, and money.

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