Ronald Bailey excogitates on a new study that may indicate why people make smarter choices with their money than with their votes.
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Huh. I've tried to figure what accounts for people's propensity to make very bad bets on the TV game show "Deal Or No Deal". I thought it was all from the contestant screening process, but maybe not.
the other Mark | August 4, 2006, 10:30am | #
excogitatesJust beautiful. That wonderful word brings tears to my eyes.
I read somewhere that we are genetically programed not to take risks. For example, most people take a sure $500 over a one in a hundred shot at $750,000, even though the odds tell you to go for the $750,000. The reason for this is that back in our hunter gatherer days, risk takers didn't live long. We got the genes of our prudent ancesters who took the least risky rout and managed to live long enough to have children. I don't know if it is true, but it makes sense.
thoreau | August 4, 2006, 11:16am | #
For me, the choice between a sure thing or a shot at a bigger thing would depend on what I could do with the sure thing. If the sure thing was $10,000 and the risk was a 1 in 100 shot at $10 million, I'll take $10,000. I could do a lot to improve my position with $10,000.If the sure thing was $100 and the risk was a 1 in 100 shot at $100,000, then I'll take the risk. There's not a lot that I can do with $100 to really improve my position.
Larry A | August 4, 2006, 11:28am | #
Ronald Bailey excogitates on a new study that may indicate why people make smarter choices with their money than with their votes.Uh, because making a choice with your money makes enough of a difference to be worth thinking about?
Legate Damar | August 4, 2006, 12:18pm | #
thoreau,How dare you bring marginal utility into this. It's much easier to make broad generalizations based on data taken from a narrow range. Tsk, tsk.
Tommy_Grand | August 4, 2006, 12:32pm | #
What is the relative utility of a 75% chance of losing $1000 versus a sure loss of $750?You are right about marginal utility Thoreau. Certainly, if you were poor enough, the $500 would look pretty good. For the average American, you are probably better off going for the $750K since $500 just isn't that much money anymore. When you get to higher numbers, say your 10K, then I am with you, I would take the sure 10K, screw the million. Perhaps my example was bad.
Eric the .5b | August 4, 2006, 1:51pm | #
Alternate hypothesis:Think of voting and purchasing as skills. There's rather a bit of evidence accumulating that the quality and speed of learning a skill is related to how often one can attempt it and how quick one can get feedback on practicing it.
For a lot of purchases, you find out whether the product or service was any good rather quickly; naturally, you also pay for things rather often. For elections, you don't get reliable feedback on the quality of the choice for weeks or months - and of course, elections are far rarer than purchases.
It seems almost inevitable that people are much less skilled at voting than buying things.
emme | August 4, 2006, 1:59pm | #
"In so-called Gain frame, the choice was framed as choosing between keeping £20 or taking a 40 percent chance of keeping the entire £50. In the Loss frame, the choice was framed as losing £30 or taking a 40 percent chance of keeping it all."I'm confused. What exactly are the choices of the lose frame?
The Real Bill | August 4, 2006, 8:03pm | #
What a waste of research. People are stupid. That's all one needs to know.(I include myself. People are very, very stupid.)
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