61–70 of 122 posts
http://en.wikipedia.org/wiki/Anchoring
Also an interesting reference about anchoring and electric cars from the above Wikipedia article:
http://www.treehugger.com/cars/nissans-leaf-creates-a-new-an...
The 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…
Earlier quoted context omitted.
The interesting thing is not that people are risk averse (and thus choose 100% chance of $900), the interesting thing is that people become risk seeking when it comes to losses (and thus choose 90% chance of -$1000). You're creating a bit of a straw man when it comes to behavioral economists and their view of "rational actors" - the whole field is built around the understanding that there is more to economic decision…
That's because Kahneman gets the signs wrong in the OP. Question 5a is: $900 @ 100%, or $1000 @ 90% Most people choose $900 @ 100% Question 5b is: -$1000 + $100 @ 100%, or -$1000 + $1000 @ 10% Most people choose -$1000 + $1000 @ 10% Written this way, the false symmetry vanishes, and we see that in both cases, people are risk averse when the payoff is low, and risk-seeking when the payoff is high. Which is to say, peo…
If I'm understanding you correctly, you're saying it's about the amounts; and I think I'd have to agree with you that for the examples to be equivalent, the amounts in 5b should be multiplied by 10. But then again, maybe that would introduce another comprehension hurdle or cognitive correction effect which would render the experiment invalid. Interesting question to ask the original researchers, although I presume that by now (after decades) they've addressed it somewhere already :)
The 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…
I don't understand. Kahneman's whole thing is showing that it's wrong to assume that humans are rational actors. Your second paragraph is exactly the point - the choices are not equivalent to humans.
I 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.
Yet I have a hard time convincing people of this, and some people sometimes feel the need to scold me for throwing away food. Despite that, I've been better off since I internalized the true nature of this (daily recurring) situation.
The same goes for question 4) . I chose A, "Yes", assuming it was a good movie worth seeing, but lacking the above-mentioned "context" (is it "Forrest Gump" or "Delta Force IV"?) any answer you give it's just to satisfy the interviewer. And yes, people DO go and see movies that they know they're bad.
A little less reading on "behavioral economics" or "animal spirits" and a little more reading of Hume will do everyone a ton of good.
Sorry to say it, but this certainly smells like cargo-cult science. First, I'm not a scientist, and not even a Nobel-prize winner, but for example I cannot understand what question 3) has to do with "science". I did have 2 dates in the past month, but I'm at one of the lowest points of my life, because, guess what? the missing context really matters (I'm about to get divorced). The same goes for question 4) . I chose…
Or rather - the theories which predict how people will (statistically) make sub-optimal decisions in certain circumstances are science: they make predictions that can be tested.
Sorry to say it, but this certainly smells like cargo-cult science. First, I'm not a scientist, and not even a Nobel-prize winner, but for example I cannot understand what question 3) has to do with "science". I did have 2 dates in the past month, but I'm at one of the lowest points of my life, because, guess what? the missing context really matters (I'm about to get divorced). The same goes for question 4) . I chose…
The 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…
Sorry to say it, but this certainly smells like cargo-cult science. First, I'm not a scientist, and not even a Nobel-prize winner, but for example I cannot understand what question 3) has to do with "science". I did have 2 dates in the past month, but I'm at one of the lowest points of my life, because, guess what? the missing context really matters (I'm about to get divorced). The same goes for question 4) . I chose…
The questions aren't science - that statistics that predict that most people will get them wrong are. Or rather - the theories which predict how people will (statistically) make sub-optimal decisions in certain circumstances are science: they make predictions that can be tested.
And yes, this quiz seems a load of underspecified cargo-cult horsecrap. I surely hope the original research was of higher quality.