The advice to pick goals hard enough that you will only achieve 75% of them is emotionally tricky to follow. Why would you want to set yourself up for failure like this? The advice makes logical sense: if you achieve 100% of your goals in a fixed time period, you probably were too conservative and left some possible gains unrealized. But how can one execute it confidently?
I see a clue in Kahneman's section on loss aversion. Excerpted: ... you will have many opportunities to consider attractive gambles with > stakes that are very small relative to your wealth. You will do yourself a > large financial favor if you are able to see each of these gambles as part > of a bundle of small gambles and rehearse the mantra that will get you > significantly closer to economic rationality: you win a few, you lose a > few. The main purpose of the mantra is to control your emotional response > when you do lose. If you can trust it to be effective, you should remind > yourself of it when deciding whether or not to accept a small risk with > positive expected value. > ... we now know that experimental subjects could be almost cured of their > loss aversion (in a particular context) by inducing them to “think like a > trader,” just as experienced baseball card traders are not as susceptible > to the endowment effect as novices are. Students made risky decisions (to > accept or reject gambles in which they could lose) under different > instructions. In the narrow-framing condition, they were told to “make each > decision as if it were the only one” and to accept their emotions. The > instructions for broad framing of a decision included the phrases “imagine > yourself as a trader,” “you do this all the time,” and “treat it as one of > many monetary decisions, which will sum together to produce a ‘portfolio.’” > The experimenters assessed the subjects’ emotional response to gains and > losses by physiological measures, including changes in the electrical > conductance of the skin that are used in lie detection. As expected, broad > framing blunted the emotional reaction to losses and increased the > willingness to take risks. > (From Thinking Fast and Slow, Daniel Kahneman, pp 763-768) *My conclusion is, the advice to set goals such that you achieve only 75% of them is only reasonable advice for people responsible for an entire portfolio of projects,* dozens of things. They can have the broad data perspective to "think like a trader" and accurately gauge risk and reward for funding different projects. The fewer the number of projects you are considering, the harder it is to have that emotional perspective that frees your logical brain from the loss aversion fallacy. The question then becomes, how should planning be structured so that people working on individual projects, who come up with the proposals and invest energy in starting, executing, and completing work, coordinate their planning with higher-budget-level planning by people who are in a position to take a more neutral view and thus to do planning free from irrational loss aversion. For example, should direct contributors come up with an excess of realistic projects so that they don't have to feel that any one project is life-and-death, and then have planners prioritize those projects by more abstract criteria? How might that diffuse responsibility, and is that good or bad?
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