h. The Evaluation of Resources and Risk/Benefit/Cost Analysis

The Evaluation of Resources and Risk/Benefit/Cost Assessment

The Evaluation of Resources

Resources are those things that we employ to gain satisfiers for our needs or to avoid contra-satisfiers. For example, time, physical and mental effort, money, etc. The effort involved consumes resources that we control, whether they belong to us or to others.

It is important to distinguish between resources and satisfiers. For example, although we are used to thinking of air as a resource, this is incorrect because no-one experiences, owns, or controls it. However, without it we would die. It is therefore a satisfier of an important existence need.

Like satisfiers and contra-satisfiers, resources are evaluated emotionally. Their value derives from the value of the changes to satisfiers and contra-satisfiers that their use causes. The latter, in turn, derive from the changes in our emotional state that they achieve.  However, it can be extremely difficult to predict what resources will be needed and whether the desired effect will be achieved. For example, we cannot predict how long a hunting expedition will take or whether it will be successful. To add a further level of complexity, several resources may be needed to acquire a satisfier or avoid a contra-satisfier.

It may be that there is an objective and logical method of deriving the value of resources from the value of changes to satisfiers and contra-satisfiers. However, this would be a very complex process and not something that we could do in our heads, especially when under pressure to make a decision. In practice, therefore, resources are valued as follows:

  1. Via social learning. For example, if a group of people find that dried cow dung burns, will provide warmth at night, and will cook food, then they will attach an emotional value to it. When raising children, they will educate them in that value. However, a modern person may not attach the same value, especially if he steps in it.
  2. From experience. For example, if spending an hour carefully choosing the ingredients for a meal results in praise for one’s cooking, then the emotional value attached to that hour (a resource) derives from the emotional value of achieving that praise (a satisfier). Over time, as we make more such assessments, we will allocate an average emotional value to an hour of our time.

Inevitably, each person places a different emotional value on each resource, and these values can alter with changing circumstances and experience.

Risk/Benefit/Cost Assessment

Rarely do we control sufficient resources to fully satisfy all our needs and avoid all our contra-needs. So, we try to apply those resources that we do control to best effect. The decision on how best to apply them uses a risk/benefit/cost assessment.

All changes to a satisfier or contra-satisfier which may be caused by an act are assessed for their overall effect on our emotional state. For each satisfier or contra-satisfier this depends on four things: the priority we give to the relevant need or contra-need; the extent to which it is already impacted upon by other satisfiers and contra-satisfiers; the anticipated change to the relevant satisfier or contra-satisfier; and the likelihood that our behaviour will make that change.

The resources that we employ also have an emotional value and their use reduces our overall emotional state. When deciding to act, we take into account both our likely use of resources and the likely changes they will make to our satisfiers and contra-satisfiers. If the net change to our emotional state is positive, then this is a benefit, and, given a choice, we would normally choose the option with the highest benefit. However, if the net change is negative, this is a dis-benefit and we would not normally adopt that option.

The Value of a Gain or Loss

It is notable that people are more averse to losing a satisfier than failing to gain it. This is known as a cognitive bias and sometimes, incorrectly, regarded as irrational. The main reason for this bias is associated with the effort involved in creating and altering our schemata. Much mental effort is put into building schemata, and mental effort is, of course, a finite resource. For example, if we own a car then we also need to incorporate this fact into our schemata for shopping, travelling to work, holidays, and so on. We also need driving skills, knowledge of road traffic law, etc.

The assessment involved is relatively simple and can, therefore, be explained by mathematical analogy. If we gain a car then we gain the net benefit of a car, (a), less the effort involved in constructing the schemata that go with it, (b). The value of gaining a car is therefore (a – b). However, if we lose a car we lose the net benefit of the car, (a), and added to this is the effort involved in revising our schemata, (c). The loss is therefore (a + c) which is, of course, greater than the gain (a – b).