3 ms·
The book also discusses that. When the problem is _not_ about a life-changing amount, it is better to take the riskier choice when the expected utility is the s
by radu_floricica 15y ago
The book also discusses that. When the problem is _not_ about a life-changing amount, it is better to take the riskier choice when the expected utility is the same. The explanation is long-ish (and honestly, almost above my head - took me awhile to grok it) and involves the sum of all such incidents over a lifetime, and differences in accumulating utility vs accumulating wealth.
Maybe someone who read the book more recently could take a stab at describing it.
- vbtemp 15y agoAs Kahneman says in the book - every experienced gambler and trader knows that "you win some, you lose some". Although we may not get multiple chances to repeat the same exact gamble, our intuition tends to lead us to minimize risk when the risk is negligible,and to maximize certainty when things are already pretty certain. This is clearly not the optimal approach. By relaxing our personal constraints a little and adjusting our strategy, over the course of a lifetime and the many gambles we take (e.g., starting that web business) they may pay greater dividends than taking our "default" human strategy.