eslreading.org for English language learners

Loss Aversion

Did you choose Option A for the dilemma in the last post? When the question was put to a group of doctors, the answers were as follows:

Option A: 72%
Option B: 28%

It seems logical. Save some lives rather than risk the loss of all of them. But then the researchers offered the same doctors this choice:

The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?

This time the answers were reversed

Option C: 22%
Option D: 78%

This seems crazy. The dilemma is essentially the same - only the wording has been changed. So why the reversal?

The key lies in the direct reference to 'deaths'. Rather than accept limited loss the doctors become willing to risk everything.

Psychologists believe that this indicates what they call 'loss aversion'. Because we hat the idea of losing something we make irrational decisions to protect what we have. For example shareholders will often refuse to sell a falling share because they don't want to accept certain loss.

Perhaps Homer Simpson was speaking for us all when he said, 'It is not okay to lose!

For more on this and other fascinating stuff on how our brains work go to Jonah Lehrer's http://scienceblogs.com/cortex/">The Frontal Cortex
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Welcome/BBC/Elvis

A very big welcome to you all. This will be the new blog spot for eslreading.org and eslyounglearners and will provide news, views and links to useful new materials to help English language learners. Most of these will be from my sites but I hope to show you some other fun things from across the web.

Been ages since I've posted - was doing BBC blog in December, struggling with the snow (we don't do snow very well in this country) and a hundred other things. Have also done a lot of work reconstructing the site and there's plenty of new stuff to check out here.

Marking the 75th birthday of Elvis with a couple of fun materials: Elvis Lives and Elvis: FBI Agent


If you haven't seen my sites, try the links above. And please get back to me with what you think!
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