# Daniel Kahneman has died, and I remember reading him and thinking he was wrong. What do you think? **URL:** \ **Category:** Great Debates\ **Created:** [March 28, 2024, 5:58pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516 "2024-03-28T17:58:59Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Sage\_Rat](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sage_rat/32/399_2.png) [@Sage\_Rat](https://boards.straightdope.com/u/Sage_Rat)\ **Post date:** [March 28, 2024, 11:37pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/23 "2024-03-28T23:37:05Z")
To check the research. > [@Tversky and Kahneman](#): > > 2.1. Procedure > The experiment was conducted on a computer. On a typical trial, the computer displayed a prospect (e.g., 25% chance to win $150 and 75% chance to win $50) and its expected value. The display also included a descending series of seven sure outcomes (gains or losses) logarithmically spaced between the extreme outcomes of > the prospect. The subject indicated a preference between each of the seven sure outcomes and the risky prospect. To obtain a more refined estimate of the certainty equivalent, a new set of seven sure outcomes was then shown, linearly spaced between a value 25% higher than the lowest amount accepted in the first set and a value 25% lower than the highest amount rejected. The certainty equivalent of a prospect was estimated by the midpoint between the lowest accepted value and the highest rejected value in the second set of choices. We wish to emphasize that although the analysis is based on certainty equivalents, the data consisted of a series of choices between a given prospect and several sure outcomes. Thus, the cash equivalent of a prospect was derived from observed choices, rather than assessed by the subject. The computer monitored the internal consistency of the responses to each prospect and rejected errors, such as the acceptance of a cash amount lower than one previously rejected. Errors caused the original statement of the problem to reappear on the screen. > > The present analysis focuses on a set of two-outcome prospects with monetary outcomes and numerical probabilities. Other data involving more complicated prospects, including prospects defined by uncertain events, will be reported elsewhere. There were 28 positive and 28 negative prospects. Six of the prospects (three nonnegative and three nonpositive) were repeated on different sessionsto obtain the estimate of the consistency of choice. Table 3 displays the prospects and the median cash equivalents of the 25 subjects. > > A modified procedure was used in eight additional problems. In four of these problems, the subjects made choices regarding the acceptability of a set of mixed prospects (e.g., 50% chance to lose $100 and 50% chance to win x) in which x was systematically varied. In four other problems, the subjects compared a fixed prospect (e.g., 50% chance to lose $20 and 50% chance towin $50) to a set of prospects (e.g., 50% chance to lose $50 and 50% chance to win x) in which x was systematically varied. (These prospects are presented in table 6.) > > 2.2. Results > The most distinctive implication of prospect theory is the fourfold pattern of risk attitudes. For the nonmixed prospects used in the present study, the shapes of the value and the weighting functions imply risk-averse and risk-seeking preferences, respectively, for gains and for losses of moderate or high probability. Furthermore, the shape of the weighting functions favors risk seeking for small probabilities of gains and risk aversion for small probabilities of loss, provided the outcomes are not extreme. Note, however, that prospect theory does not imply perfect reflection in the sense that the preference between any two positive prospects is reversed when gains are replaced by losses. Table 4 presents, for each subject, the percentage of risk-seeking choices (where the certainty equivalent exceeded expected value) for gains and for losses with low (p \_\< .1) and with high (p \_ .5) probabilities. Table 4 shows that forp \_\> .5, all 25 subjects are predominantly risk averse for positive prospects and risk seeking for negative ones. Moreover, the entire fourfold pattern is observed for 22 of the 25 subjects, with some variability at the level of individual choices. > > Although the overall pattern of preferences is clear, the individual data, of course, reveal both noise and individual differences. The correlations, across subjects, between the cash equivalents for the same prospects on successive sessions averaged .55 over six different prospects. Table 5 presents means (after transformation to Fisher’s z) of the correlations between the different types of prospects. For example, there were 19 and 17 prospects, respectively, with high probability of gain and high probability of loss. The value of .06 in table 5 is the mean of the 17 x 19 = 323 correlations between the cash equivalents of these prospects. > > The correlations between responses within each of the four types of prospects average .41, slightly lower than the correlations between separate responses to the same problems. The two negative values in table 5 indicate that those subjects who were more risk averse in one domain tended to be more risk seeking in the other. Although the individual correlations are fairly low, the trend is consistent: 78% of the 403 correlations in these two cells are negative. There is also a tendency for subjects who are more risk averse for high-probability gains to be less risk seeking for gains of low probability. This trend, which is absent in the negative domain, could reflect individual differences either in the elevation of the weighting function or in the curvature of the value function for gains. The very low correlations in the two remaining cells of table 5, averaging .05, indicate that there is no general trait of risk aversion or risk seeking. Because individual choices are quite noisy, aggregation of problems is necessary for the analysis of individual differences. [http://cemi.ehess.fr/docannexe/file/2780/tversjy\_kahneman\_advances.pdf](http://cemi.ehess.fr/docannexe/file/2780/tversjy_kahneman_advances.pdf) (table on p 307) ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [March 28, 2024, 11:39pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/24 "2024-03-28T23:39:10Z")
The odd part of these things is that I fret way more over trivial amounts than large ones. I feel super bad if, say, something ruins a $20 lunch. But if the stock market is down that day and I lose $20,000? Meh. The $20 is just way more concrete than the $20,000 and hurts more. I think that for the small amounts, there is a bit more bias against losses. Losing $20 feels worse than gaining $20. But for the abstract amounts, it’s about the same. And then there’s stuff like spending way too much time figuring out which toothpaste is cheapest, even when the difference is like 15 cents and can’t possibly pay back the time I wasted staring at the wall of options. But _not_ doing that also feels bad. ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [March 28, 2024, 11:48pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/25 "2024-03-28T23:48:58Z")
I can relate to the toothpaste thing, but the other way around: I tend to buy the more expensive one, although I know that it is not really better. But I buy it nonetheless. Despite being aware that the 15 cent (more like 1 €, but never mind) is a rounding error. Do you think Elon Musk thinks about toothpaste? Ever? I remember reading somewhere that the founder of Wal Mart not only took the cheap ball pens in hotels, but instructed his staff to do the same. What can be more ~~irrelevant~~ trivial than that? (And there was a time I had dozens of those ball pens 😃 But I only used the nice one I bought. It was not better, it just looked cooler. And felt better in my hand. It was a gold plated [Cross](https://i.ebayimg.com/images/g/e1AAAOSwPkheNHBw/s-l500.jpg). Now I use a Caran D’Ache my wife gifted to me on my 50th. And I no longer take the cheap ones). ---
**Author:** ![Dr.Strangelove](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr.strangelove/32/6613_2.png) [@Dr.Strangelove](https://boards.straightdope.com/u/Dr.Strangelove)\ **Post date:** [March 29, 2024, 12:02am UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/26 "2024-03-29T00:02:13Z")
> [@Pardel-Lux](#): > > Despite being aware that the 15 cent (more like 1 €, but never mind) is a rounding error. The last time I think it was even less than 15 cents at stake. I noticed that the 3-pack of some brand was actually more expensive than the individual units by a couple of cents. So I ended up getting those. But just the extra time spent grabbing the three separate ones and putting them through the self-checkout wasn’t worth those few cents! > [@Pardel-Lux](#): > > Do you think Elon Musk thinks about toothpaste? Ever? I dunno about Musk, but there’s this story about Bill Gates and Warren Buffett: > **[Bill Gates Recalls The Time Fellow Billionaire Warren Buffett Treated Him To...](https://finance.yahoo.com/news/bill-gates-recalls-time-fellow-174029938.html)** > > Berkshire Hathaway Inc. Chairman and CEO Warren Buffett is immensely wealthy and notoriously frugal. His frugality isn't for personal gain. He has given billions to various charities and signed the Giving Pledge, affirming that over 99% of his... Buffett probably made $1000 in the time just digging those coupons out of this pocket. ---
**Author:** ![Mangetout](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mangetout/32/19_2.png) [@Mangetout](https://boards.straightdope.com/u/Mangetout)\ **Post date:** [March 29, 2024, 12:03am UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/27 "2024-03-29T00:03:42Z")
> [@Pardel-Lux](#): > > I do not think that risk aversion and the possibility of being eaten by a tiger are equivalent. Losing 100$ or losing your life are, I believe, not at the same evolutionary level. Losing money creates a risk. Yes, it’s a different risk than a hungry tiger, but that’s a matter of degree. Perhaps a tiger was a distracting example of a threat. In the environment where our ancestors arose, losing your clothing, losing the food you had already gathered, losing the water you were carrying, were all threats that could be potentially serious. We perceive threats more acutely than benefits. ---
**Author:** ![Mighty\_Mouse](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mighty_mouse/32/7776_2.png) [@Mighty\_Mouse](https://boards.straightdope.com/u/Mighty_Mouse)\ **Post date:** [March 29, 2024, 12:36am UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/28 "2024-03-29T00:36:34Z")
I said it depends. If I were to wake up tomorrow to find that I’d lost a million dollars in the stock market, it make me considerably more miserable than the happiness I would feel if somehow I had gained a million. That’s because losing a million will mean a material change in my retirement prospects. I’d probably choose to work longer. Gaining a million might give me more of a cushion, but likely would benefit my heirs more than it would me. The same thing for $100k each way would be meh. $10k I wouldn’t even notice. That’s why I don’t gamble. The prospect of going to a casino and winning $500 (or $5,000 even) seems hardly meaningful. But that’s a Big Day for some people I know who have much higher income and wealth than I do. There’s zero excitement for me in taking a chance on a time fraction of my net worth. Winning a tennis tournament is a big deal to me, winning a few hands of blackjack or a few spins of the roulette wheel, not so much. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [March 29, 2024, 1:15pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/29 "2024-03-29T13:15:25Z")
It’s pretty obvious that people think that way, if you watch game shows. Even though that money they’ve “won” isn’t their money, they didn’t work for it, etc… they _still_ agonize over whether to press their luck, or go for the final round or whatever. If they were being rational about it, they wouldn’t be sweating the game show money, as there’s literally nowhere to go but up, in the context of the real world. You don’t come out of a game show poorer than before; the question is to what degree do you come out ahead. ---
**Author:** ![pulykamell](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pulykamell/32/3166_2.png) [@pulykamell](https://boards.straightdope.com/u/pulykamell)\ **Post date:** [March 29, 2024, 1:32pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/30 "2024-03-29T13:32:40Z")
> [@Dr.Strangelove](#): > > The odd part of these things is that I fret way more over trivial amounts than large ones. I feel super bad if, say, something ruins a $20 lunch. But if the stock market is down that day and I lose $20,000? Meh. The $20 is just way more concrete than the $20,000 and hurts more. Hell no for me, the latter would sting much worse….except that I’m in it for the long run with the market, and diversified, so I don’t care about day-to-day swings and know they will happen. So I don’t care. I got twenty years or more to make up for that swing. It’s not a $20k loss to me, it’s just part of the random walk with an upward trajectory (hopefully.) On the other hand, were I short sightedly insvested all in one stock and I lost $20k because the stock went completely bust, that would really really suck. With the $20 dinner, I don’t think it’s so much concreteness as that with the investment you expect the loss to be temporary or just a small part of an overall growing porftolio. With the dinner, you’re out that money. (And I wouldn’t be upset about $20, anyway. Who cares?) ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 29, 2024, 1:36pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/31 "2024-03-29T13:36:04Z")
I think Kahneman’s work was clever and groundbreaking. But it is a tremendous simplification to reduce it to this one point. I was sad to hear this news of his passing. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [March 29, 2024, 2:06pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/32 "2024-03-29T14:06:42Z")
> [@bump](#): > > It’s pretty obvious that people think that way, if you watch game shows. Even though that money they’ve “won” isn’t their money, they didn’t work for it, etc… they _still_ agonize over whether to press their luck, or go for the final round or whatever. > > If they were being rational about it, they wouldn’t be sweating the game show money, as there’s literally nowhere to go but up, in the context of the real world. You don’t come out of a game show poorer than before; the question is to what degree do you come out ahead. Maybe I’m misinterpreting what you’re saying, but that doesn’t sound like “being rational”; it sounds like the “[House Money Effect](https://breakingdownfinance.com/finance-topics/behavioural-finance/house-money-effect/)”: the tendency to think of money differently depending on its source, and specifically to treat money you win as different from money you earn. This is part of [Mental Accounting](https://thedecisionlab.com/biases/mental-accounting), which, like loss aversion, is an important concept in behavioral economics. ---
**Author:** ![Dr\_Paprika](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dr_paprika/32/3042_2.png) [@Dr\_Paprika](https://boards.straightdope.com/u/Dr_Paprika)\ **Post date:** [March 29, 2024, 2:34pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/33 "2024-03-29T14:34:32Z")
Some gift links. WARNING! Shoppers are reminded that soup purchases are limited to 12 cans. > **[A CONVERSATION WITH Daniel Kahneman; On Profit, Loss and the Mysteries of the...](https://www.nytimes.com/2002/11/05/health/a-conversation-with-daniel-kahneman-on-profit-loss-and-the-mysteries-of-the-mind.html?ugrp=u&unlocked_article_code=1.gU0.X11I.KSuNRkGDDF29&smid=url-share)** > > Erica Goode interviews Nobel prize winner Dr Daniel Kahneman about his groundbreaking theories of human behavior as they relate to economics; collaboration with Professor Dr Amos Tversky discussed; work of Kahneman and Tversky provided undergirding... > **[Opinion | Who You Are (Published 2011)](https://www.nytimes.com/2011/10/21/opinion/brooks-who-you-are.html?ugrp=u&unlocked_article_code=1.gU0.3l14.PFa53Xe5gjEV&smid=url-share)** > > As Daniel Kahneman’s next book comes out, let’s reflect on the pioneers who explored the flawed terrain of our cognitive faculties. > **[For a Fairer World, It’s Necessary First to Cut Through the ‘Noise’...](https://www.nytimes.com/2021/05/18/books/review/noise-daniel-kahneman-olivier-sibony-cass-sunstein.html?ugrp=u&unlocked_article_code=1.gU0.lefr.tfc_Hbg0EJDL&smid=url-share)** > > In their new book, Daniel Kahneman, Olivier Sibony and Cass R. Sunstein address the necessity of “noise reduction,” eliminating the randomness that enters decision making of all sorts. ---
**Author:** ![Babale](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/babale/32/15666_2.png) [@Babale](https://boards.straightdope.com/u/Babale)\ **Post date:** [March 29, 2024, 4:44pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/34 "2024-03-29T16:44:18Z")
> [@Pardel-Lux](#): > > I read Kahneman’s argument and feel, based on my perception (what else! - well, my wife’s perception, who happens to agree with me on this one), that it is not true, I go on and ask you, the Dope, what you think. I ask because I know ~~I~~ we may be wrong. What better approach do you suggest? Byt Kahneman did not present “an argument” based on his “feelings” regarding what he perceived. He ran a study, got results, and interpreted them. Since then, other people ran other studies, and interpreted them as well. Some agreed with Prospect Theory, some did not. This paper contains a review of some of the relevant work that has been done on the topic in the last 30 years: > **[Thirty Years of Prospect Theory in Economics: A Review and Assessment -...](https://www.aeaweb.org/articles?id=10.1257%2Fjep.27.1.173)** > > (Winter 2013) - In 1979, Daniel Kahneman and Amos Tversky, published a paper in \Econometrica\ titled "Prospect Theory: An Analysis of Decision under Risk." The paper presented a new model of > risk attitudes called "prospect theory," which... You said, you believe this theory may have a US bias. Fine - did you look up any studies done in other countries to support or dismiss that claim? ---
**Author:** ![Babale](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/babale/32/15666_2.png) [@Babale](https://boards.straightdope.com/u/Babale)\ **Post date:** [March 29, 2024, 4:54pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/35 "2024-03-29T16:54:43Z")
To put it another way… Prospect Theory is a model used to describe the decisions made by human beings. It is not a perfect model; human decision making is not as rigid as the acceleration of a ball towards the earth at 9.8m/s^2. But it has _more explanatory power_ than traditional economic models that assume we are all rational actors working to maximize utility. A number of empirical tests have shown that what happens in reality lines up with Prospect Theory’s assumptions better than simple analysis of utility. Other studies came to other conclusions - the models didn’t work perfectly in every situation they were tested under - and researchers have come up with different explanations as to why this might be the case. All that is much stronger evidence than how I feel a theory lines up with my own subjective experience. _Especially_ since the whole point of the theory is that _us humans are pretty bad at assessing this kind of stuff_. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 29, 2024, 8:36pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/36 "2024-03-29T20:36:44Z")
> [@Thudlow\_Boink](#): > > Maybe I’m misinterpreting what you’re saying, but that doesn’t sound like “being rational”; it sounds like the “[House Money Effect](https://breakingdownfinance.com/finance-topics/behavioural-finance/house-money-effect/)”: the tendency to think of money differently depending on its source, and specifically to treat money you win as different from money you earn. This is part of [Mental Accounting](https://thedecisionlab.com/biases/mental-accounting), which, like loss aversion, is an important concept in behavioral economics. That may be, but it might also be the Endowment effect, which causes people to increase the value of an object that they possess. The experiment was giving half of a class of MBA students mugs. They them immediately asked the students with mugs how much they would need to be paid to sell them, and those without mugs how much they would pay to get them. The students with mugs gave a significantly higher amount. I’ve observed this effect in engineering (and have a paper that mentions it.) To make a chip easier to test, you add some hardware to it. In the old days designers objected vehemently to this, because the area of the chip went up say 10%, and that costs money. Then they stopped objecting. The reason, I think, is that the tools to synthesize the chip design knew that this overhead was going to be added, and put it in at the beginning. While the end area was exactly the same, the designers never saw the smaller area before the insertion of the hardware, and so did not feel the loss. ---
**Author:** ![Voyager](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/voyager/32/133_2.png) [@Voyager](https://boards.straightdope.com/u/Voyager)\ **Post date:** [March 29, 2024, 8:52pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/37 "2024-03-29T20:52:12Z")
> [@Pardel-Lux](#): > > To me that suggests rather innumeracy, not that Kahneman’s argument is right. Sellers of insurance (which is in principle a good thing!) are savvy. They know to make money. It’s their job. It might be innumeracy, but how many people would do the calculation, and not go with their gut instinct. And many similar effects have been shown to work on people with high levels of mathematical skills. Here is an example from a class my daughter and I taught on behavioral economics applied to engineering. (She has a PhD in Judgement Decision Making, which is the more general term for the field.) The class was engineers experts in testing computer chips, who all knew all about failure rates and defect per million rates. We did a survey of the class with two questions. For the first, half the class got the question “Is the defect per million rate for ICs in the field more or less than 1 per million.” The other half got the question “Is the defect rate more or less than 100,000 per million.” The answer is more for the first and less for the second. Then they all got the question “estimate the DPM rate for all chips.” There is obviously no good answer to this, because it depends on all sorts of things. However, the first group’s estimate was much lower than the second groups. The results were statistically significant even for a small population size. In fact the distribution was perfectly bimodal. It was a great example because the audience, like me, prides themselves on being rational engineers, and they all certainly have great math skills. This effect, called anchoring, is hard wired into us. > [@Pardel-Lux](#): > > I do not think that risk aversion and the possibility of being eaten by a tiger are equivalent. Losing 100$ or losing your life are, I believe, not at the same evolutionary level. Kahneman oversymplifies that. It is tempting to do so, and a good conversation starter, but I think it is not true. I don’t see evolution operating that way. > I suspect there is some degree of USA-centrism in his reasoning. Well, clearly primitive man didn’t play the market. The point is that the biases we have built in due to the proverbial tiger have impacts on our decisions today. It would be odd if they were too US centric given that they are both Israeli. Western centric perhaps. I’m not aware of any studies done in non-Western countries. I’ll ask my daughter, she’ll probably know. However I do know of similar studies for other things done in China, with the same kind of results. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [April 1, 2024, 1:11am UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/38 "2024-04-01T01:11:40Z")
What I’m saying is that when you go on a game show, there’s no chance that your bank account will actually go down. The very absolute worst thing that happens is that you don’t win anything and you’re exactly where you were when you went in. Everything else is varying degrees of winning money. But people act like there’s some sort of loss involved with money you don’t actually have (yet), and are very risk-averse to losing this fictitious money, and will often not take chances and leave rather than “lose” the money. Which is absurd; you don’t _ever_ come out behind. ---
**Author:** ![BigT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bigt/32/12044_2.png) [@BigT](https://boards.straightdope.com/u/BigT)\ **Post date:** [April 1, 2024, 1:34am UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/39 "2024-04-01T01:34:56Z")
> [@bump](#): > > What I’m saying is that when you go on a game show, there’s no chance that your bank account will actually go down. The very absolute worst thing that happens is that you don’t win anything and you’re exactly where you were when you went in. Everything else is varying degrees of winning money. > > But people act like there’s some sort of loss involved with money you don’t actually have (yet), and are very risk-averse to losing this fictitious money, and will often not take chances and leave rather than “lose” the money. > > Which is absurd; you don’t _ever_ come out behind. ⁢ I don’t agree with that analysis at all. There are two different situations you could be describing. 1. The person gets to keep the money they win. If that’s the case, then they effectively have been given the money when it is awarded to them, and do lose money when it is taken away. That they don’t have it now is no different than the fact that they haven’t received their paycheck yet. It doesn’t mean you’d be okay with having your paycheck reduced. 2. They don’t get to keep the money unless they win. In that case, they are concerned with losing progress towards winning, rather than the money itself. The more points you have, the more likely you are to win and get to convert those points to money. Neither one is irrational at all. Your argument seems the most irrational. The fact that I won’t be any worse off than I started doesn’t change the fact I was guaranteed, say, $10,000, until I risked it all on a question. Even I claw back $500, I still could have gotten $10,500. And a net win of $500 is still $10,000 less than a win of $10,500. ---
**Author:** ![Q.Q.Switcheroo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/q.q.switcheroo/32/5713_2.png) [@Q.Q.Switcheroo](https://boards.straightdope.com/u/Q.Q.Switcheroo)\ **Post date:** [April 1, 2024, 12:39pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/40 "2024-04-01T12:39:05Z")
Not to mention the risk of making yourself look like a jerk in front of millions of people, and bringing shame and disgrace on your family name for generations to come. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [April 1, 2024, 12:59pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/41 "2024-04-01T12:59:34Z")
You don’t get to come back tomorrow. You don’t even get a lousy copy of our home game. You’re a complete loser! ---
**Author:** ![Pardel-Lux](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pardel-lux/32/20182_2.png) [@Pardel-Lux](https://boards.straightdope.com/u/Pardel-Lux)\ **Post date:** [April 1, 2024, 10:08pm UTC](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516/42 "2024-04-01T22:08:26Z")
> [@Dr\_Paprika](#): > > I think Kahneman’s work was clever and groundbreaking. But it is a tremendous simplification to reduce it to this one point. I was sad to hear this news of his passing. I hope I did not come across as saying that he was dumb or that I was glad he died: I just believe the risk/loss aversion statement is not always correct. I think it is wrong in my case. > [@Babale](#): > > _Especially_ since the whole point of the theory is that _us humans are pretty bad at assessing this kind of stuff_. That argument reminds me of the Freudian analysts who claim that if you don’t agree with their assesment of our problem it just proves that you have exactly this problem and are suppresing it. If Kahneman states “people are bad at assesing this” and I claim “but this is not true in my experience” answering “see what I mean? You are denying the facts which proves the facts are as I stated” is a circular argument. > [@Voyager](#): > > It would be odd if they were too US centric given that they are both Israeli. Western centric perhaps. I may be wrong, but I think the relevant studies were made in the USA, with US students. It is known as [WEIRD](https://www.cambridge.org/core/elements/psychologys-weird-problems/C324108A678435B4F18EF712EFB793BB) problem, and I think it is more a US than Western specific in Kahneman’s case. Has your daughter come up with any interesting results for non-Western countries? In one of the links provided by other posters in this thread (haven’t found which one, there are so many, sorry) it was stated that Kahneman’s assertion did hold reasonably well for China, but not so much for Africa, FWIW. Checking the details, in particular the methodology, is beyond my capabilities. Just in general: I did not expect nor wish this thread to become adversarial. I am surprised it even got that controversial (maybe I am being thin-skinned here). As of today (51 answers to the poll) just under 50% agree with Kahneman, 30 see a nuance (it depends) and 20% disagree. I think that validates the question: it was not asked as a gotcha or in bad faith. [Previous page](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516.md?page=1) [Next page](https://boards.straightdope.com/t/daniel-kahneman-has-died-and-i-remember-reading-him-and-thinking-he-was-wrong-what-do-you-think/999516.md?page=3)