Ejudy
Thu, Oct-10-02, 20:58
So maybe this means through our experiential associations and
tapping into them through cultural methodologies (like
media/salemanship) we select our choices. And that this is not
a purely logical rational behavior but perhaps tunes itself to
the societal needs?
ejudy
http://www.nytimes.com/2002/10/10/business/10PRIZ.html?pagewa-
nted=print&position=top
"— tested the limits of the standard economic theory of choice
in predicting the actions of real people. The theory assumes
that individuals make decisions systematically, based on their
preferences and available information, in a way that changes
little over time or in different contexts. By the late 1970's,
Professor Kahneman and Mr. Tversky had begun to perform
experiments with human subjects that suggested seemingly
irrational wrinkles in behavior.
In a 1981 article, they reported results of a study in which
152 students were given hypothetical choices for trying to
save 600 people from a disease. Using one strategy, exactly
200 people could be saved for certain. Using another, there
would be a one-third chance everyone would live, and a
two-thirds chance no one would be saved. Seventy-two percent
of the subjects, preferring the less risky strategy, chose
the first option. But when the researchers presented 155
other students with the same choice worded differently —
either 400 people would die for sure or there would be a
one-third chance that no one would die — only 22 percent
chose the first option.
The difference, Professor Kahneman and Mr. Tversky explained,
stemmed from the presentation of the options as sure gains or
sure losses. People in their experiments generally shunned
risk when gains, like lives saved, were in question — they
wanted to lock in the gains with certainty. Yet people
preferred risk when the alternative was a certain loss, even
if taking the risk implied the chance of an even greater loss.
Professor Smith's work formalized laboratory techniques for
studying economic decision making, with a focus on trading and
bargaining. In the early 1960's, he was among the first
economists to make experimental data a cornerstone of his
academic output. His studies included people playing games of
cooperation and trust and simulating different types of
markets in a laboratory setting."
tapping into them through cultural methodologies (like
media/salemanship) we select our choices. And that this is not
a purely logical rational behavior but perhaps tunes itself to
the societal needs?
ejudy
http://www.nytimes.com/2002/10/10/business/10PRIZ.html?pagewa-
nted=print&position=top
"— tested the limits of the standard economic theory of choice
in predicting the actions of real people. The theory assumes
that individuals make decisions systematically, based on their
preferences and available information, in a way that changes
little over time or in different contexts. By the late 1970's,
Professor Kahneman and Mr. Tversky had begun to perform
experiments with human subjects that suggested seemingly
irrational wrinkles in behavior.
In a 1981 article, they reported results of a study in which
152 students were given hypothetical choices for trying to
save 600 people from a disease. Using one strategy, exactly
200 people could be saved for certain. Using another, there
would be a one-third chance everyone would live, and a
two-thirds chance no one would be saved. Seventy-two percent
of the subjects, preferring the less risky strategy, chose
the first option. But when the researchers presented 155
other students with the same choice worded differently —
either 400 people would die for sure or there would be a
one-third chance that no one would die — only 22 percent
chose the first option.
The difference, Professor Kahneman and Mr. Tversky explained,
stemmed from the presentation of the options as sure gains or
sure losses. People in their experiments generally shunned
risk when gains, like lives saved, were in question — they
wanted to lock in the gains with certainty. Yet people
preferred risk when the alternative was a certain loss, even
if taking the risk implied the chance of an even greater loss.
Professor Smith's work formalized laboratory techniques for
studying economic decision making, with a focus on trading and
bargaining. In the early 1960's, he was among the first
economists to make experimental data a cornerstone of his
academic output. His studies included people playing games of
cooperation and trust and simulating different types of
markets in a laboratory setting."