Thursday, September 2, 2010

Maxilon Running Fashion



Imagine the following experiment. I'll give you € 1,000 and then offer you two choices:
  1. flip a coin and if it comes up heads give you another 1,000 €, if tails do not give you any extra
  2. directly
  3. give you € 500 more

Spend half a minute to think and choose.

Now imagine this other experiment. I'll give you € 2,000 and then offer you two choices:
  1. flip a coin and if I remove it comes up heads € 1,000 and if tails you do not remove anything.
  2. I remove the face € 500
Spend another 30 seconds to think and choose.

Apparently most people take "b" in the first experiment and "a" in the second. And this is really funny (irrational as well) because in both experiments the "a" is the same in both experiments and the "b" is the same. Just think

If you choose "a" you get 50% of € 1,000 or € 2,000. If you choose "b" safely get € 1,500.

But depending on the experiment that we perceive as a risk of profit or loss will be more or less willing to take risks.

this idea I took the following video, a talk by TED Talks (with subtitles) by Laurie Santos. The video also extrapolates the experiment on monkeys to see to what extent this human irrational attitude is intricate in our biology (this extrapolation, however, gives me a little skeptical urticaria).

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