Fear can be viewed through the lens of behavioural economics as a deviation from rational decision-making. Let’s consider a common example: the fear of financial uncertainty, particularly when making career or investment decisions.

From an economic standpoint, this fear is closely tied to loss aversion, a concept introduced by Daniel Kahneman and Amos Tversky in their Prospect Theory. (Kahneman received the Nobel Prize in Economics in 2002 for this work). Loss aversion suggests that people tend to feel the pain of losses more intensely than the pleasure (or utility in economic terms) of equivalent gains. This can lead to a status quo bias: the tendency to avoid change, even when change might offer better long-term outcomes.

Take, for example, the hesitation to leave a stable job or to invest in a new opportunity. A person in this situation might be overweighting rare but vivid worst-case scenarios (a manifestation of the availability heuristic) while discounting more probable and positive outcomes.

How can individuals begin to overcome these fear-driven biases? Some strategies include:

1. Framing risks more objectively, using tools like expected value or scenario analysis;

2. Clarifying possible outcomes and assigning realistic probabilities to each;

3. Taking small, low-stake steps into uncertainty, such as starting side projects or trial investments, to build experience and confidence.

Economics teaches us that emotions like fear, though evolutionarily useful, can distort how we evaluate choices. Overcoming fear isn’t about suppressing it, but rather about recognizing when it interferes with rational judgment and learning how to counterbalance its influence with structured decision tools.