Three concepts that are discussed in the book Sway are loss aversion, value attribution, and diagnostic bias. Here is a overview of each of those topics.
In simple terms, loss aversion means that we naturally try to reduce our losses even if it means sticking with something when it would be best to not to.
People cringe at the thought of experiencing a loss. Have you ever rented a car before? Was the person helping you kind enough to recommend getting rental insurance for the car? Did you start to worry about a possible disaster like someone crashing into you or even worst, the car being totaled and you being stuck with a massive bill?
That rental car insurance is starting to look really helpful at that point and it really isn’t that much more…
However, it turns out that your credit card may offer complimentary rental car insurance as a benefit of being a cardholder.
When I first read this, I grabbed my wallet and looked at my credit card and then called my credit card company to ask about benefits. It turns out that my card includes rental car insurance for being a member. So the next time that you are getting ready to travel, check with your credit card company to see the available perks of being a member. Then you can politely decline the rental car insurance with a thanks, but no thanks and a smile!