The Undoing Project: A Friendship That Changed Our Minds
Second, being wrong hurts us more than being right feels good. We know from Daniel Kahneman and Amos Tversky’s work on loss aversion, part of prospect theory (which won Kahneman the Nobel Prize in Economics in 2002), that losses in general feel about two times as bad as wins feel good. So winning $100 at blackjack feels as good to us as losing $50
... See moreAnnie Duke • Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts
previous decisions. Only 22 percent voted for option C, while 78 percent chose option D, the risky strategy. Most doctors were now acting just like Frank: they were rejecting a guaranteed gain in order to participate in a questionable gamble. Of course, this is a ridiculous shift in preference. The two different questions examine identical dilemmas
... See moreJonah Lehrer • How We Decide
The only people who are immune to this mistake are neurologically impaired patients who can't feel any emotion at all. In most situations, these people have very damaged decision-making abilities. And yet, because they don't feel the extra sting of loss, they are able to avoid the costly emotional errors brought on by loss aversion. Consider this e
... See moreJonah Lehrer • How We Decide
€100,000 less than he was offered thirty seconds before. The irony is that this offer is utterly fair; Frank would be wise to cut his losses and accept the Banker's proposal. But Frank immediately rejects the deal; he doesn't even pause to consider it. After another unlucky round, the Banker takes pity on Frank and makes him an offer that's about 1
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