This is worth watching (and here’s the link for the subscribers).
For more on loss aversion, check out these older posts:
PS: thanks to my friend Werner for pointing me in the direction of the video.
Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at www.facebook.com/rollingalpha.
Pa April 7, 2015 at 15:26
If you put the money up….. I’m betting… But I bet you not…. Heads or …ahead!!Reply
Zee April 10, 2015 at 08:37
I wonder… does the second bet ($20:$10) seem less enticing because we see it as a small $10 incremental gain? What I’m wondering is, if he skipped the $10:$10 bet and just proposed the $20:$10 bet to begin with, would the responses have been any different?Reply
Jayson April 11, 2015 at 11:38
I think you might be right…
But the thing is: that’s just as irrational. If your decision changes on the exact same scenario, simply because something else was said before it, then we’re showing a framing bias?Reply