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The actual studies by Kahneman and Tversky mentioned at the start are more interesting and solid than this handful of anecdotes. If you're not familiar with the
by goodside 17y ago
The actual studies by Kahneman and Tversky mentioned at the start are more interesting and solid than this handful of anecdotes. If you're not familiar with them, they might well be one of the most important things you've ever Googled for.
The results: people weigh losses and gains with "1) a value function that is concave for gains, convex for losses, and steeper for losses than for gains, and 2) a nonlinear transformation of the probability scale, which overweights small probabilities and underweights moderate and high probabilities." This does little to convey the soul-crushing horror you will feel when you see these preferences demonstrated experimentally.
- paul 17y agoDo you have a particular link? Googling returns a lot of different things.
- DXL 17y agoTry the paper(s) named (Cumulative) Prospect Theory.
- realitygrill 17y agoProspect theory has been around for almost 30 years and has it's own problems. But of course the experimental results are illuminating.. A good summary of these findings can be found in http://www.hss.caltech.edu/~camerer/ribe239.pdf http://www.hss.caltech.edu/~camerer/ribe239.pdf, the intro to Advances in Behavioral Economics (2003)
- joe_bleau 17y agoI think this may be it: http://www.hss.caltech.edu/~camerer/Ec101/ProspectTheory.pdf http://www.hss.caltech.edu/~camerer/Ec101/ProspectTheory.pdf