Consider this widely discussed / over referenced scenario.
There is an explosion you are a witness to. Three men are injured.
They are lying injured on the ground. If they do not receive medical aid, all three will bleed to death.
Which of the following do you feel is the best rescue option?
- A rescue attempt in which one of the three men will be saved.
- A rescue in which there’s a one-third chance that all three men will be saved and a two-thirds chance that no one will be saved.
What was your answer? 1 or 2?
Now, let me give you two other choices. Now, think which of the following you would attempt?
- A rescue attempt in which two men will die.
- A rescue in which a one-third chance exists that nobody will die and two-thirds chance that all three men will die.
1 or 2?
Don’t read any further until you answer both questions above.
If you are like most others… you answered 1 in the initial set and 2 in the latter. But… both scenario’s are exactly the same! In both, in option 1, one man will be saved and two dead. In option 2, the chances are exactly the same.. just reworded!
Now.. why did you choose one over the other?
Aversion of loss! Illusion of risk!
When set 1 used the words “Save”, you became risk averse and chose the sure scenario of saving one man! In set 2, when the same was reworded with die, you became more risk lenient to give a shot at avoiding more loss.
Isn’t our interpretation of risk fragile? And illusory?
Aren’t we fooled by loss-aversion in several cases?
Think about it!
An Analysis of Decision under Risk by Daniel Kahneman and Amos
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