3 ms·

You are defining rational behavior as ignoring variance and accepting expectation as a gauranteed outcome for a trial. I don't want to be a jerk, but you are w

by fixxer 10y ago

You are defining rational behavior as ignoring variance and accepting expectation as a gauranteed outcome for a trial. I don't want to be a jerk, but you are wrong to a phenomenal degree.

FullMtlAlcoholc 10y ago
You're not being a jerk. I should've put quotes around rational to highlight that this was the common thinking at the time in the field. That was just a extremely example of Prospect Theory. Before this was presented as a better model to understand human behavior, the prevailing theory didn't take into account that humans are even risk averse with gains and more likely to take risks with losses. My main point was that it took psychologists to present a model of man that resembled reality Cumulative Prospect Theory takes this into account and states that people tend to overweight extreme, but unlikely events, but underweight "average" events, but I digress I was just trying to show the base irrationality of the human mind. Here's another example. Consider you have two offers for the New York Times: [A] $59 – Internet Only Subscription $125 – Internet and Print Subscription [B] $59 – Internet Only Subscription $125 – Print Only Subscription $125 – Internet and Print Subscription Both offers are the same, with the exception of including the “print only” subscription in Offer A. Despite the fact that not a single person chose that unattractive offer, its impact was dramatic – In a study, 62% more subjects chose the combined print and Internet offer, and predicted revenue jumped 43%. The print-only offer was the decoy, and served to make the combined offer look like a better value. This is called decoy marketing and is only one of an arsenal of tools that is used to take advantage of the irrational mind. You'll see this everywhere so it pays to identify it.

3 ms·

You are defining rational behavior as ignoring variance and accepting expectation as a gauranteed outcome for a trial. I don't want to be a jerk, but you are w

by fixxer 10y ago

You are defining rational behavior as ignoring variance and accepting expectation as a gauranteed outcome for a trial. I don't want to be a jerk, but you are wrong to a phenomenal degree.

FullMtlAlcoholc 10y ago
You're not being a jerk. I should've put quotes around rational to highlight that this was the common thinking at the time in the field. That was just a extremely example of Prospect Theory. Before this was presented as a better model to understand human behavior, the prevailing theory didn't take into account that humans are even risk averse with gains and more likely to take risks with losses. My main point was that it took psychologists to present a model of man that resembled reality Cumulative Prospect Theory takes this into account and states that people tend to overweight extreme, but unlikely events, but underweight "average" events, but I digress I was just trying to show the base irrationality of the human mind. Here's another example. Consider you have two offers for the New York Times: [A] $59 – Internet Only Subscription $125 – Internet and Print Subscription [B] $59 – Internet Only Subscription $125 – Print Only Subscription $125 – Internet and Print Subscription Both offers are the same, with the exception of including the “print only” subscription in Offer A. Despite the fact that not a single person chose that unattractive offer, its impact was dramatic – In a study, 62% more subjects chose the combined print and Internet offer, and predicted revenue jumped 43%. The print-only offer was the decoy, and served to make the combined offer look like a better value. This is called decoy marketing and is only one of an arsenal of tools that is used to take advantage of the irrational mind. You'll see this everywhere so it pays to identify it.