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Sunday, April 15, 2012

Decision making process and psychology

This is very interesting:

In a 1981 article, they reported results of a study in which 152 students were given hypothetical choices for trying to save 600 people from a disease. Using one strategy, exactly 200 people could be saved for certain. Using another, there would be a one-third chance everyone would live, and a two-thirds chance no one would be saved. Seventy-two percent of the subjects, preferring the less risky strategy, chose the first option. But when the researchers presented 155 other students with the same choice worded differently -- either 400 people would die for sure or there would be a one-third chance that no one would die -- only 22 percent chose the first option.
Daniel Kahneman, a professor of psychology and public affairs at Princeton University, who is also a citizen of Israel, and Vernon L. Smith, a professor of economics and law at George Mason University in Fairfax, Va., shared the Nobel prize in economics in 2002.

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