4 ms·

I don't think his first example is good because it isn't just about a "loss" it's about feeling wronged. By the reasoning he gives we should just let criminals

by pmorici 17y ago

I don't think his first example is good because it isn't just about a "loss" it's about feeling wronged. By the reasoning he gives we should just let criminals and murderers free because it costs more to jail them and give them a fair trial than it does to just let them be free and commit the occasional crime. The argument would be more persuasive if the example used had to do with something where it was a pure gain / loss as opposed to having a right / wrong component to it. I think the dating example was better, though that wasn't used as his central argument.

CamperBob 17y ago
True, it was a terrible example. The guy in the story obviously didn't care about the $11 and change, as much as he cared about seeing justice done. His impulse has value to society that far exceeds $11. Edit, re: By the reasoning he gives we should just let criminals and murderers free because it costs more to jail them and give them a fair trial than it does to just let them be free and commit the occasional crime. In some cases that does in fact make sense... 9/11 comes to mind. The price of living in a free society isn't $2 trillion plus incalculable collateral harm, it's losing a building and a couple of planes every once in awhile.
- holiday 17y ago
  Perhaps, but the scam site probably didn't care about the $11 either. I can't see them in dispair, OMG Somebody claimed the $11 back Crime Doesn't Pay! This wasn't a serious attack on their "business model". The Loss Aversion Bias is also behind one of the classic mistakes people make when investing in stocks: holding on to a loser while the price goes down and down, unwilling to sell and accept the loss before it gets any worse.
  - pbhjpbhj 17y ago
    >Perhaps, but the scam site probably didn't care about the $11 either. I'd expect the scammers to have a chargeback, which can be just the difference but is usually the total value and again can be more with an admin cost added. They also get a black mark from the bank which could with repetition lead them to having their account closed (but probably not if they're making good profits for the bank). Banks don't like spending money that could be used for bonuses and so the admin costs are more significant and will turn the bank off their client quite readily. Edit: there's Bystander Effect in there too - why should I complain as it probably won't do any good because other people won't complain.
- deleted 17y ago
  [deleted]
- anamax 17y ago
  > True, it was a terrible example. The guy in the story obviously didn't care about the $11 and change, as much as he cared about seeing justice done. His impulse has value to society that far exceeds $11. That last sentence is an important point. He's increasing the costs of the scammers.
DXL 17y ago
Additionally - I am not certain about the mentioned scientists' exact definition of loss - you might argue that since the damage was already done (Joe had already been charged), the 11 dollars was a gain rather than an adverted loss.
- jackowayed 17y ago
  It's a loss, at least as far as your brain is concerned. (Logically, there's no real difference, the fact that it's already technically been incurred is pretty meaningless. (Also, you could argue that since he hadn't paid his credit card bill yet, it wasn't incurred yet.)) Your brain says "this is $11 that I wasn't supposed to spend that they took from me!" That's a loss. You want to get the money you lost due to their mistake back.
zacharypinter 17y ago
I think it's a workable example. When dealing with these types of issues, I've personally found it helpful to calculate a personal dollars-per-hour and then weigh potential tasks against that. Let's say a person makes or values their time at $30-$50 an hour. That's roughly a month of TimeSvr.com (or similar outsourcing services) for two hours of time. In this example, even if the person felt wronged and was willing to spend $100+ (in dollars or time) addressing the issue out of principle, they'd still be better off outsourcing the task, or perhaps writing a negative review/blog post.
- bemmu 17y ago
  I'm not convinced about outsourcing small tasks. If he had outsourced the task of getting that $11, he would need to explain it to another person and give that person all of the personal details etc. needed to do the task. After all this, there is still no guarantee that the task even gets done as you want. Maybe you neglected to specify something, or the other person just isn't as careful and motivated to do the task as you would be. This doesn't even count the time spent finding that person in the first place, and you also need to take into account the risk of unresponsiveness or plain failed result. Some of my failed outsourcing experiments: Task: Finding images matching a description (used asksunday.com) Result: Service ignored details of my request and gave me useless pics. Task: Create personality tests for an OpenSocial app (rentacoder.com) Result: Hired several people. Some were unresponsive and didn't do anything. Some did eventually, but there were many spelling and grammatical errors. Some tests were in foreign languages and claimed to be native level, but upon checking with native speakers this turned out to be false. Task: A content writing task (details escape me, but I directly hired some chinese outsourcing company) Result: Company copy & pasted content from other sites. The issue is probably that I haven't been careful enough in selecting the people to outsource to, or haven't paid enough to motivate serious bidders for my tasks. Successful ones: Task: Accept packages I sent from Japan and bring them to a convention center in Wien. Result: Package delivered as promised. This was the one that saved me the most effort and money. Task: Create a list of words starting with given letter combination. Result: List delivered as specified, but in the wrong format. Task: Scan books and send images to me (this was OK because I was official translator for said books) Result: Images delivered as promised.
mattchew 17y ago
> I don't think his first example is good because it isn't just about a "loss" it's about feeling wronged. You're correct that the example and the title aren't a perfect match, but wasting four hours because you feel aggrieved isn't really any better for you than wasting four hours to save yourself losing a small amount of money. Sometimes you just ought to let go. Alas, I happen to be the poster child for this particular bit of irrationality. Notably, I spend a lot of time and mental effort agonizing over fairly small purchases. I know it's a mistake in the abstract, but that doesn't help the aversion to spending money in the moment.

by pmorici 17y ago

CamperBob 17y ago

True, it was a terrible example. The guy in the story obviously didn't care about the $11 and change, as much as he cared about seeing justice done. His impulse has value to society that far exceeds $11. Edit, re: By the reasoning he gives we should just let criminals and murderers free because it costs more to jail them and give them a fair trial than it does to just let them be free and commit the occasional crime. In some cases that does in fact make sense... 9/11 comes to mind. The price of living in a free society isn't $2 trillion plus incalculable collateral harm, it's losing a building and a couple of planes every once in awhile.

holiday 17y ago
Perhaps, but the scam site probably didn't care about the $11 either. I can't see them in dispair, OMG Somebody claimed the $11 back Crime Doesn't Pay! This wasn't a serious attack on their "business model". The Loss Aversion Bias is also behind one of the classic mistakes people make when investing in stocks: holding on to a loser while the price goes down and down, unwilling to sell and accept the loss before it gets any worse.
- pbhjpbhj 17y ago
  >Perhaps, but the scam site probably didn't care about the $11 either. I'd expect the scammers to have a chargeback, which can be just the difference but is usually the total value and again can be more with an admin cost added. They also get a black mark from the bank which could with repetition lead them to having their account closed (but probably not if they're making good profits for the bank). Banks don't like spending money that could be used for bonuses and so the admin costs are more significant and will turn the bank off their client quite readily. Edit: there's Bystander Effect in there too - why should I complain as it probably won't do any good because other people won't complain.
deleted 17y ago
[deleted]
anamax 17y ago
> True, it was a terrible example. The guy in the story obviously didn't care about the $11 and change, as much as he cared about seeing justice done. His impulse has value to society that far exceeds $11. That last sentence is an important point. He's increasing the costs of the scammers.

DXL 17y ago

Additionally - I am not certain about the mentioned scientists' exact definition of loss - you might argue that since the damage was already done (Joe had already been charged), the 11 dollars was a gain rather than an adverted loss.

jackowayed 17y ago
It's a loss, at least as far as your brain is concerned. (Logically, there's no real difference, the fact that it's already technically been incurred is pretty meaningless. (Also, you could argue that since he hadn't paid his credit card bill yet, it wasn't incurred yet.)) Your brain says "this is $11 that I wasn't supposed to spend that they took from me!" That's a loss. You want to get the money you lost due to their mistake back.

zacharypinter 17y ago

I think it's a workable example. When dealing with these types of issues, I've personally found it helpful to calculate a personal dollars-per-hour and then weigh potential tasks against that. Let's say a person makes or values their time at $30-$50 an hour. That's roughly a month of TimeSvr.com (or similar outsourcing services) for two hours of time. In this example, even if the person felt wronged and was willing to spend $100+ (in dollars or time) addressing the issue out of principle, they'd still be better off outsourcing the task, or perhaps writing a negative review/blog post.

bemmu 17y ago
I'm not convinced about outsourcing small tasks. If he had outsourced the task of getting that $11, he would need to explain it to another person and give that person all of the personal details etc. needed to do the task. After all this, there is still no guarantee that the task even gets done as you want. Maybe you neglected to specify something, or the other person just isn't as careful and motivated to do the task as you would be. This doesn't even count the time spent finding that person in the first place, and you also need to take into account the risk of unresponsiveness or plain failed result. Some of my failed outsourcing experiments: Task: Finding images matching a description (used asksunday.com) Result: Service ignored details of my request and gave me useless pics. Task: Create personality tests for an OpenSocial app (rentacoder.com) Result: Hired several people. Some were unresponsive and didn't do anything. Some did eventually, but there were many spelling and grammatical errors. Some tests were in foreign languages and claimed to be native level, but upon checking with native speakers this turned out to be false. Task: A content writing task (details escape me, but I directly hired some chinese outsourcing company) Result: Company copy & pasted content from other sites. The issue is probably that I haven't been careful enough in selecting the people to outsource to, or haven't paid enough to motivate serious bidders for my tasks. Successful ones: Task: Accept packages I sent from Japan and bring them to a convention center in Wien. Result: Package delivered as promised. This was the one that saved me the most effort and money. Task: Create a list of words starting with given letter combination. Result: List delivered as specified, but in the wrong format. Task: Scan books and send images to me (this was OK because I was official translator for said books) Result: Images delivered as promised.

mattchew 17y ago

> I don't think his first example is good because it isn't just about a "loss" it's about feeling wronged. You're correct that the example and the title aren't a perfect match, but wasting four hours because you feel aggrieved isn't really any better for you than wasting four hours to save yourself losing a small amount of money. Sometimes you just ought to let go. Alas, I happen to be the poster child for this particular bit of irrationality. Notably, I spend a lot of time and mental effort agonizing over fairly small purchases. I know it's a mistake in the abstract, but that doesn't help the aversion to spending money in the moment.