Interesting. I'm not sure if my moves were right mathematically. I basically played as though I had one shot i.e., I pull a lever with a 5% chance once and I either win or get nothing. Similarly for the losing position. However, if I get to play a lot my answers would be completely different. While the expected value of $1000 with a 13% chance and multiple plays is $130, the probable value for a 13% chance and one play is zero dollars.
Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
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Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#12Just went through it and feel, as it seems many here do, that my financial risk-aversion quotient will be no higher than that of the general population.
Does anyone else think that what really makes us entrepreneurs wasn't touched upon by the survey?
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#13I'm sure that my behavior does not reflect my answers on this test. Given the numbers, I calculate expected value and answer rationally. In real life, a) the values and percentages are much less clear and b) even if they weren't I know I don't follow them as rationally.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#14I'm sure my choices here have been completely spoiled by all the pop-science books I read, in that my first thought upon each type of question was "Ah, that's from this and this research, where they found out that..." They need an "are you familiar with these types of questions?" question, because both the statistically expected answer and the rational answer were already known to me. I assume this is the case for more entrepreneurs, so I doubt this questionnaire will display a large discrepancy between entrepreneurs and non-entrepreneurs.
All I can say is, Pop-science books are fun, everyone should read more of them.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#15I'm sure my choices here have been completely spoiled by all the pop-science books I read, in that my first thought upon each type of question was "Ah, that's from this and this research, where they found out that..." They need an "are you familiar with these types of questions?" question, because both the statistically expected answer and the rational answer were already known to me. I assume this is the case for mo…
Yeah, I'm afraid I also did the "I'm a rational economic actor" answers,
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#16The experimental setup isn't great: the HN population almost certainly has an elevated level of education in areas like math and statistics. I don't think you should ever compare subjects who can compute "expected value" with ones who can't. Personally, I don't believe I can give great answers for this, because I'm conscious there's an experiment going on.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#17I just went through it, choosing almost exclusively certainties. I'm definitely an entrepreneur, although currently a very struggling one. I fear the survey is going to be incredibly influenced by income level and current financial security. If you had changed the magnitudes of the numbers, my answers would have been completely different. I can do the math, but I also know that my immediate financial needs are unmet…
Without a doubt. For instance, I will always take a $50 loss over any chance of a $1000 loss, because $50 one way or the other barely has in impact on my day, let alone my life. $1000, on the other hand is significant.
If however, the questions had been about $500 vs. $10,000, I'd have to think a bit more carefully.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#18I'm sure my choices here have been completely spoiled by all the pop-science books I read, in that my first thought upon each type of question was "Ah, that's from this and this research, where they found out that..." They need an "are you familiar with these types of questions?" question, because both the statistically expected answer and the rational answer were already known to me. I assume this is the case for mo…
Yeah, I'm afraid I also did the "I'm a rational economic actor" answers,
That's funny--I had no trouble figuring out what I'd actually prefer, and even though I'm familiar with the various stories about risk-aversion and such, I think my answers make sense in the context of my income and finances.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#19The questions are flawed because many entrepreneurs have already used up all their risk seeking "slack" and might quite rationally prefer to lose $50 over a 1% chance of losing $1500, since a $50 loss could be dealt with more easily in the context of a ramen budget... while a $1500 loss might destroy the company entirely.
In other words, just because you are in a casino and put all your money on double zero doesn't mean that you should also play russian roulette with a pistol while the roulette wheel is spinning.
Re: Are Entrepreneurs Pirates? 4min Test for HN by Behavioral Economist Dan Ariely
#20The experimental setup isn't great: the HN population almost certainly has an elevated level of education in areas like math and statistics. I don't think you should ever compare subjects who can compute "expected value" with ones who can't. Personally, I don't believe I can give great answers for this, because I'm conscious there's an experiment going on.
Here's a question: how does this assertion sync with Arrington's claim that entrepreneurs would choose low-to-negative expected value projects simply for the thrill of gambling, as it were? What's going on here?