Why we should all fear failure

Martha Gill's Irrational Animals column.

At one point in Ben Ainslie’s first heat he dropped to 11th place. As other boats sped past him, the on-board camera showed him looking more and more put out. But then the sailors changed direction, moving against the wind, and Ainslie began to recover ground. He worked his way up the stretch through sheer strength, moving from tenth to ninth to eighth (although his expression didn’t vary), and finishing the heat in second place.

After winning a gold medal overall (his fourth in four Olympics), he wrote in the Telegraph: “The pressure on me in the build-up was intense. For months – years – I kept getting told I was going to win. No matter how many times I said it wasn’t a foregone conclusion, people kept building me up. That begins to have an effect on you no matter how focused you try to remain.”

As a defending champion, you're in the unpleasant position of trying not to lose, rather than simply trying to win. Yet the effect might not be a bad one. Economists talk about the principle of “loss aversion” – the theory that we care much more about losing than making an equivalent gain. The indignity of being in 11th place at the first mark prompted Ainslie to find a sudden source of strength, and it seems the pressure to defend a title generally might give sports champions an extra motivational nudge.

The economists Devin Pope and Maurice Schweitzer studied this in golf – a sport that will incidentally make a return to the Olympics in 2016. In golf, it is fairly easy to see how you’re doing at each stage of the game, as the number of strokes needed to make a par is fixed for each hole. When a player approaches a hole, he might either be putting to avoid a stroke over par (a bogey) or putting to gain a stroke under par (a birdie).

The researchers looked at 2.5 million near-identical putts by 421 professional golfers (no mean feat) and found that players performed better when trying to avoid a bogey, or a loss, even though the motion of the club was exactly the same.  They calculated that if Tiger Woods had performed equally well for birdies as he did bogeys, he would have improved his earnings by $1m per season. Players fight harder, they concluded, to avoid losses than they do to make gains.

Odd thinking

This strange, asymmetrical thinking is evident in other areas, too, but it isn’t always a good thing. A 2003 study by Ernst Fehr and Lorenz Goette showed how bicycle messengers make silly economic choices just to avoid the feeling of missing their daily target. On days when they are paid more commission per hour, they reach their target earnings quickly and knock off early. On days when pay is low they stay out much later. This isn’t logical. They should stay out longer on days when business is good, and take time off on the slow days. They can’t help themselves, though – they are programmed to focus on losses.

One final example: as Chris Adams of the Financial Times has noticed, Twitter’s attention to the markets seems to rise in inverse proportion to the markets themselves. Bad news is always more interesting than good.

Ben Ainslie. Photograph, Getty Images

Martha Gill writes the weekly Irrational Animals column. You can follow her on Twitter here: @Martha_Gill.

This article first appeared in the 13 August 2012 issue of the New Statesman, The New Patriotism

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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