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His nobel prize lecture is well worth a watch if you have 37 minutes to spare. http://www.nobelprize.org/mediaplayer/index.php?id=531 http://www.nobelprize.org
by mixmax 15y ago
His nobel prize lecture is well worth a watch if you have 37 minutes to spare.
http://www.nobelprize.org/mediaplayer/index.php?id=531 http://www.nobelprize.org/mediaplayer/index.php?id=531
- sesqu 15y agoThis lecture revealed an error in question 5. The Vanity Fair article says "Kahneman and Tversky debunked Bernoulli’s utility theory, a cornerstone of economic thought since the 18th century. (Bernoulli first proponed that a person’s willingness to gamble a certain amount of money was a product of how that amount related to his overall wealth—that is, $1 million means more to a millionaire than it does to a billionaire.)" But in the lecture, Kahneman stated no qualms with utility theory. Rather, he pointed to the application of the theory, where Bernoulli had assumed a gain of $1 million is equivalent to $1 million appearing in their bank account, with the mechanism being irrelevant. That is what prospect theory (and the associated question) debunks.