The paper they wrote in 1983 is a must read for all entrepreneurs (and sales people in general): http://pol-sci.uga.edu/courses/2008/ainsworthfall08kahnemant...
The quiz Daniel Kahneman wants you to fail
31–40 of 122 posts
Re: The quiz Daniel Kahneman wants you to fail
#32The engineer/lawyer problem explanation (spoilers) is only correct in a world where lawyers and engineers have all the same characteristics. That the sampled individual is a man will skew things all by itself. Of the lawyers, approximately 40% will be women, whereas only 11% of the engineers. So our samplee could be one of 27 engineers or 42 lawyers - we've already bumped Peng from .3 to .39! That he likes math puzzl…
I think it still depends which school do you belong, Bayesian or frequentists. A real frequntist may not assign a probability to a single instance of society! he is either an engineer or not!
Re: The quiz Daniel Kahneman wants you to fail
#33The questions involving "90% chance of $1000 or 100% chance of $900" always bother me. I never understand why economists think that a rational actor would consider them equivalent; they're not , unless you are making that choice many many times. But if I'm given that chance once (which is presumably what most participants assume, since that's not a choice that comes up often in one's life), it's really then a choice…
My AI professor had a great explanation for this:
* lottery B = $900
* lottery A = 0.9 chance of $1000 and 0.1 chance of 0 + feeling stupid.Re: The quiz Daniel Kahneman wants you to fail
#34I didn't much like this: " being swayed by the way in which questions are worded rather than responding just to their substance " (for the lost ticket being allegedly equivalent to $10). Is a ticket, which costs $10, emotionally equivalent to $10? Once bought, the ticket is unique in my eyes, whereas I'm not even sure how many $10 bills I have in my wallet even now. So if I lose one, well, maybe it wasn't there in th…
I would dare say unless you're rational, not necessarily an economist. Most of us are not rational all the time, and the whole point of the question is to show an instance where we are not. You would be correct if there were not other tickets available; in that case, the ticket truly is unique. But in the example given you could acquire another one. In that case the ticket is not unique and is equivalent to the cost…
Is it rational to considers unknown possibilities and assigns gain to them and then decide, and if so what would be the numbers?
Re: The quiz Daniel Kahneman wants you to fail
#35The questions involving "90% chance of $1000 or 100% chance of $900" always bother me. I never understand why economists think that a rational actor would consider them equivalent; they're not , unless you are making that choice many many times. But if I'm given that chance once (which is presumably what most participants assume, since that's not a choice that comes up often in one's life), it's really then a choice…
By rescaling the numbers, the two questions can be turned into:
- "Would you pay $900 for a 90% chance to win $1000?"
- "Would you pay $100 for a 10% chance to win $1000?"
So the distribution of results really is different. It's not just a phrasing trick. I would still say no to the first and yes to the second. I like positive outliers more than negative ones. This doesn't seem irrational to me.
Re: The quiz Daniel Kahneman wants you to fail
#36As someone who has had lots of economics/probability training, this quiz really doesn't do the research justice. It gets a point across, but could have been presented better. I was bothered by its misuse of terminology and the quiz not really being one.
Spoilers ahead!
1. The answer could be A or C, depending on how small and large the hospitals are. The small hospital could easily be expected to have 2. I don't see why the correct response must be 30%. Such attributes conditionally describe an engineer better than a lawyer. Assuming random sampling of lawyers and engineers, I'd be surprised if the answer isn't > 30%. I'm not sure what the numbers are actually, as I don't know how strong this conditional applies to engineers or lawyers.
The point of the research is that people over-emphasize the conditional over the prior (indeed often ignore the prior), not that people should not use conditional information.
3. " it is likely that your answer to question (a) is positively correlated to your answer to question (b)"
I understand what they are trying to say, but the wording is quite off. Correlation is a property of data, not an individual point. If I'm the only person who ever takes this test, my answers have undefined correlation. The modifier "likely" is especially baffling (correlation is a constant property of data).
Proper (and less verbose!) terminology is "people's answers to (a) are positively correlated to (b)"
Re: The quiz Daniel Kahneman wants you to fail
#37I've started reading 'Thinking, Fast and Slow' and really like it so far. If anyone in the Bay area wants it after I'm done let me know.
Re: The quiz Daniel Kahneman wants you to fail
#38Not exactly the same, but my favorite visceral examples of imperfect heuristics are "garden-path sentences"[1]. These are sentences that trick you into having to backtrack when you're parsing them, which brings the whole parsing process into sharp relief.
[1]: http://en.wikipedia.org/wiki/Garden_path_sentence
A good example is:
The old man the boat.
Re: The quiz Daniel Kahneman wants you to fail
#39The questions involving "90% chance of $1000 or 100% chance of $900" always bother me. I never understand why economists think that a rational actor would consider them equivalent; they're not , unless you are making that choice many many times. But if I'm given that chance once (which is presumably what most participants assume, since that's not a choice that comes up often in one's life), it's really then a choice…
Economists do not all think that way. Just as there are many differing perspectives in other sciences (feel free to cringe if you are a mathematician, chemist, etc.), there are a range of schools in economics as well. Though I cannot fully delve into the topic at this time, variance is certainly taken into consideration by many economists. Depending on the situation, (number of betting cycles etc.) variance is very important. So, in a one-off bet, it makes sense that the utility between these choices would differ.
I tried to find a good resource that further explains this but wasn't able to quickly find one. If I am able, I will try and post one later today.
On a final note, all of the situations in this quiz are easily correctly answered (or in some cases, predicted) with a basic knowledge of statistics and economics.
Re: The quiz Daniel Kahneman wants you to fail
#40I didn't much like this: " being swayed by the way in which questions are worded rather than responding just to their substance " (for the lost ticket being allegedly equivalent to $10). Is a ticket, which costs $10, emotionally equivalent to $10? Once bought, the ticket is unique in my eyes, whereas I'm not even sure how many $10 bills I have in my wallet even now. So if I lose one, well, maybe it wasn't there in th…
I actually find it very useful to emotionally detach from a commodity - that is treat all tickets to the movie theater as the same. I generally find it bad to fall into the sunk-cost effect and I am much happier when I avoid it.