Loss Aversion

Did you choose Option A for the dilemma in the last post? When the question was put to a group of doctors, the answers were as follows:

Option A: 72%
Option B: 28%

It seems logical. Save some lives rather than risk the loss of all of them. But then the researchers offered the same doctors this choice:

The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?

This time the answers were reversed

Option C: 22%
Option D: 78%

This seems crazy. The dilemma is essentially the same - only the wording has been changed. So why the reversal?

The key lies in the direct reference to 'deaths'. Rather than accept limited loss the doctors become willing to risk everything.

Psychologists believe that this indicates what they call 'loss aversion'. Because we hat the idea of losing something we make irrational decisions to protect what we have. For example shareholders will often refuse to sell a falling share because they don't want to accept certain loss.

Perhaps Homer Simpson was speaking for us all when he said, 'It is not okay to lose!

For more on this and other fascinating stuff on how our brains work go to Jonah Lehrer's http://scienceblogs.com/cortex/">The Frontal Cortex

Did you choose an option for the dilemma in the last post? Did you choose option A? When the question was put to a group of doctors, the answers were as follows:

Option A: 72%
Option B: 28%

It seems logical. Save some lives rather than risk the loss of all of them. But then the researchers offered the same doctors this choice:

The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?

This time the answers were reversed

Option C: 22%
Option D: 78%

This seems crazy. The dilemma is essentially the same - only the wording has been changed. So why the reversal?

The key lies in the direct reference to 'deaths'. Rather than accept limited loss the doctors become willing to risk everything.

Psychologists believe that this indicates what they call 'loss aversion'. Because we hat the idea of losing something we make irrational decisions to protect what we have. For example shareholders will often refuse to sell a falling share because they don't want to accept certain loss.

Perhaps Homer Simpson was speaking for us all when he said, 'It is not okay to lose!

For more on this and other fascinating stuff on how our brains work go to http://scienceblogs.com/cortex/

Doctor's Dilemma

Here’s a dilemma for you from the psychologists, Tversky and Kahneman. They asked the following to a group of doctors

The U.S. is preparing for the outbreak of an unusual Asian disease. It is expected to kill 600 people.

Two alternative programs to combat the disease have been proposed.

If program A is adopted, 200 people will be saved.

If program B is adopted, there is a one third probability that 600 people will be saved and a two-thirds probability that no people will be saved.

Which of the two programs would you favor?

What do you think? I'll post the survey findings later today.

Oscars

I love cinema and go when I can so I've managed to catch quite a few of this years nominations for best film. Here's my verdict on those I've seen:

District 9 - original but not much fun from my point of view. The alien invaders are convincingly grim and grubby but why do I want to spend two hours in their depressing company? 6/10
An Education - a slight disappointment. Nice period detail but ponderous and I was not quite as won over by the central performance. The problem for me is that none of the main characters is sympathetic and all the action seems telegraphed. Then again I have read the original Lynne Barber account which is more interesting in my view 6.5
The Hurt Locker - heard good reports
Inglorious Bastards - a mess. Good opening but the following two+ hours are violent and incoherent 3/10
Precious - haven't seen it but popular amongst my colleagues.
A Serious Man - Excellent. Cohn brothers move to a new level. Curiously, the weakest part of the film is the opening - thought we were in for a long dreary tale about East European peasants. 9/10
Up - Animation is a hard sell for me but this really is a bravura performance. 8/10
Up In The Air - looks great in the trailers and will try and see. Hope George C manages to control that head tilting thing he employs at ever opportunity
Avatar - haven't seen it but don't fancy either the glasses or the virtual world. My wife says its 'the worst film I've ever seen' and she likes sci-fi.

I've prepared a themed page (with slideshow) about the first meeting between John Lennon & Paul McCartney here: http://www.esllistening.org/beatles/beatles/johnmeetspaul.html

For younger age groups, try this page:
http://younglearners.eslreading.org/songs/beatles/beatles/yellowsubmarine.html