Learning is increasingly important if we’re to survive in our rapidly changing world, so understanding how best to incentivize people to learn is vital.  Recent research from the University of Geneva explores whether people are more inclined to learn when they stand to gain or when they stand to lose.  They reveal that people tend to become more confident in their decision to learn when that decision is driven by the desire for rewards than it is by being driven by a desire to avoid losses.

This confidence can easily descend into over-confidence however, which can lead us to believe we know a lot more than we actually do, with the monetary gain resulting in us being less flexible and adaptable to change.

Volunteers in the research were shown a couple of abstract symbols on a computer screen, one of which gave the volunteer a 75% chance of winning 50 cents, whilst the other only gave a 25% chance.  The volunteers were tasked with choosing a symbol and asked to rate their confidence in their choice.  This was continued over a number of iterations to evaluate the learning path of the volunteers over time as they learned to evaluate the symbols.  The process was then reversed to mimic losses, with the volunteers asked to select the symbol that had the lowest probability of losing money.

Ability to learn

The data shows that our ability to learn is largely identical regardless of whether we’re seeking to gain or avoid losses.  Our confidence in our knowledge is most definitely not however, with confidence much higher when we stand to make money than when we stand to avoid losing it.  This increase in confidence can have some significant consequences.

“It’s normal for confidence to increase during the learning process because participants increasingly choose the most profitable symbol. But this phenomenon is intensified when it comes to the pursuit of gain: participants end up clearly overestimating their performance. This over-confidence, which is at about 10%, is not there when it comes to avoiding losing money,” the authors explain.

The group was then split, with half of the participants going onto a second experiment where the quality of the symbols was reversed.  Interestingly, when the participants were in the context of financial gain, they appeared to struggle to adapt to this change, whilst those in the financial loss context adapted more successfully.

“This is probably the result of evolution: when there’s a danger, you have to think quickly and adapt your decisions, while when everything is going well, we try to maintain the positive situation,” the researchers explain.

The authors believe that their findings will inform how teachers function, and especially how they tailor teaching to each individual student.

“The learning context is crucial. The fear of loss makes people anxious and they begin to doubt their choices; yet it also provides more flexibility and accuracy. The lure of profit, on the other hand, boosts self-confidence and well-being but reduces our ability to make assessments. Then it’s a question of striking a balance between the two elements,” the authors conclude. “We also found that participants made their choices faster in the positive context than in the negative.”

As such, it is perhaps wise to provide a variety of different types of learning, and understand when to prioritze speed, confidence or accuracy.  Then you can choose to focus on rewards or punishment accordingly.