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The article's author David Gal claims that 'loss aversion' is a fallacy. But in the book Thinking Fast and Slow, Daniel Kahneman says that the following experim
by MarkMc 8y ago
The article's author David Gal claims that 'loss aversion' is a fallacy. But in the book Thinking Fast and Slow, Daniel Kahneman says that the following experiment demonstrates loss aversion.
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People are randomly given one of two problems:
Probem A: In addition to whatever you own, you have been given $1,000. You are now asked to choose one of these options: 50% chance to win $1,000 OR get $500 for sure
Problem B: In addition to whatever you own, you have been given $2,000. You are now asked to choose one of these options: 50% chance to lose $1,000 OR lose $500 for sure.
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According to Kahneman, many more people will take the gamble when it is framed as potential win (Problem A) rather than as a potential loss (Problem B).
So is Gal saying this experiment is not reproducible or that it doesn't demonstrate loss aversion?