I spoke with someone recently who asserted that they would prefer an 100% chance of getting a dollar, than a 99% chance of getting $1,000,000. Now, I don’t think that they would actually do this if the situation was real, i.e. if they had $1,000,000 and there was a 1 in 100 chance that it would be lost, they wouldn’t pay someone $999,999 to do away with that probability and therefore guarantee them the $1
Losing money and gaining money is not the same. Most humans use heuristics that treat both cases differently. If you want to understand someone you shouldn’t equate both cases even if they look the same in your utilitarian assessment.
I understand that, which is why I concede that they may choose the million in one case and not in the other. But I think that their decision may be based on other factors, i.e. that they don’t actually believe they’d get the million with 99% probability. They’re imagining someone telling them ,”I’ll give you a million if this RNG from 1-100 comes out anything but 100 (or something similar)”, and are not factoring out distrust. My example with reversing the flow of money was also intended to correct for that.
Perhaps the heuristics you refer to are based on this? Has this idea of “trust” been tested for correlation with “losing money and gaining money” distinction?
Losing money and gaining money is not the same. Most humans use heuristics that treat both cases differently. If you want to understand someone you shouldn’t equate both cases even if they look the same in your utilitarian assessment.
I understand that, which is why I concede that they may choose the million in one case and not in the other. But I think that their decision may be based on other factors, i.e. that they don’t actually believe they’d get the million with 99% probability. They’re imagining someone telling them ,”I’ll give you a million if this RNG from 1-100 comes out anything but 100 (or something similar)”, and are not factoring out distrust. My example with reversing the flow of money was also intended to correct for that.
Perhaps the heuristics you refer to are based on this? Has this idea of “trust” been tested for correlation with “losing money and gaining money” distinction?