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My kids hated to fail, and we had many long talks about what it means to "not win" and why you don't always "have" to win. My parents never really talked to me about that and I saw it negatively effecting my behavior as an adult. My kids are still sub-12 so I hope they can learn to be competitive in life, but take defeat gracefully.
Better to learn how to succeed and fail through your own efforts when the stakes are small and learning is encouraged. Sux to go through this stuff for the first time during job interviews...