This is why tough times produce radical measures, radical leaders, and radical change. The call for revolution sounds weird in good times, but when things are bad, upending the status quo feels irresistible. We rarely think about selling stocks when their value is rising (when we could lock in our gains) but are enormously tempted to sell, sell, sell when their value starts to fall.
Goalies facing penalty kicks—a bad place to be if you are a goalie—are heavily predisposed to dive to one side or another to save a goal, even though their best odds of saving a goal are when they stay in the center. In one analysis of 293 penalty kicks in elite championship soccer, researchers Michael Bar-Eli, Ofer H. Azar, Ilana Ritov, Yael Keidar-Levin, and Galit Schein found that goalies had a 14 percent chance of stopping a goal when they dived to the left and a 13 percent chance when they dived to the right. The chance of stopping a goal when they stayed in the center was 33 percent. But, like voters and people stuck in traffic jams, goalies facing penalty kicks are drawn to action, not inaction. The analysis of the championship penalty kicks found that goalies stayed in the center only 6 percent of the time.
Why do we habitually choose action over inaction when things are bad? The intuitive answer is that action promises to get us out of the mess we're in. But that intuition turns out to be wrong. The action bias is driven less by the fear of failure than by the fear of regret.
Goalies experience less regret when they dive and allow a goal than when they stay in the center and allow a goal. Stockholders experience less regret when they sell—even if the market later rebounds—than when they hold onto a losing portfolio and watch it drop. In the run-up to the Iraq war, Sen. Hillary Clinton summarized the action bias when she said, "In balancing the risks of action versus inaction, I think New Yorkers who have gone through the fires of hell may be more attuned to the risk of not acting. I know that I am."
A goalie who dives and misses is heroic. A goalie who stays in the center and misses is just … ineffectual. Goalies dive because they seek to minimize their emotional losses, not their actual losses.
When things are stacked against us—we face a tough economy, we are fighting a war that appears lost, we are in a marriage that is fraying—people behave like soccer goalies facing penalty kicks. We make changes. We believe we are being bold when, in reality, we are flailing. We are minimizing regret, not loss.
None of this is to say that making a change is always bad. Staying in the center all the time is a losing strategy for goalies. (Bar-Eli's study found that goalies save the most goals when they stay in the center 29 percent of the time.) But when things look bad, our unconscious bias favors action over holding steady, regardless of whether that makes sense.
Politicians intuitively understand this. Barack Obama's winning 2008 campaign constantly reminded voters how weary they were with the Bush administration, even though George W. Bush was not running for president in 2008. Republicans this year have offered very few concrete counterproposals to the Democratic policies they say they detest. When times are bad, it turns out that all you need to say to voters to get them to come running to you is, "Had enough?"