After a short break from our “Ruling Principles” series to settle your exam results nerves, we return to look at another principle of psychology that governs how we live. This week, it’s Action Bias.
At its simplest, action bias is exactly what it says – a bias for action. But let’s take a more detailed look at it.
Action bias refers to our preference for action over inaction. When faced with the decision to act or do nothing, we almost always act, even though not doing anything is often more beneficial. We do this because we (wrongly) believe that value can only be produced from action.
Here’s an example to illustrate. It’s a classic that a group of Israeli researchers reported in “Action Bias among Elite Soccer Goalkeepers: The Case of Penalty Kicks” (Bar Eli et al., 2006).
As you may have guessed from the title of the paper, the study investigated why football goalkeepers always dive in attempt to save penalties, and whether it is actually beneficial. Goalkeepers pretty much always dive either left or right before they have even determined where the ball is heading, even though statistically most penalties are kicked down the middle of the goal.
The reason for their premeditated dives is action bias. The feelings associated with conceding after not diving (inaction) are worse than what would be felt had they dived (action). This is because we liken not diving to not trying, and diving to a genuine attempt to make a save.
Investors are susceptible to it too. They will often react with action to natural fluctuations in the market, rather than inaction. If a stock’s value depreciates, investors are more likely to act and sell their stocks as soon as they can, even though their value may rise soon after. In this case, not acting would be more beneficial than acting.
In layman’s terms, we feel worse about negative consequences that arise from inaction than we do about negative consequences that arise from action. Perhaps due to a sense of guilt. Doing nothing is associated with not trying, so we feel guilty that we could have done something to prevent the consequences.
You don’t have to be a goalkeeper or an investor to fall victim to action bias though. We all suffer. How many times have you switched queues in shops, only to find that the queue you were in in the first place would have been quicker? Doing nothing would have been the better option, but your bias for action caused you to move. It also happens in motorway queues, in strategic thinking games and in business.
We just can’t get away from it.
So just why is it so hard to avoid action bias?
Well, because avoiding it requires the very traits that action bias works against: patience, restraint, inaction. To overcome our action bias, it is helpful to see the benefits of doing nothing. But in order to see the benefits of doing nothing, we must overcome action bias. You see where the struggle is?
As such, action bias governs many of the decisions we make in life. Some are trivial, like which queue we should stand in. Others have more serious implications for our careers, finances and futures, like business and investment decisions. And some determine who wins the most watched leagues and competitions in the world.