STUDY |

Health

BEHAVIOR CHANGE

Daniel Kahneman

Summary by

Mark Egan

This classic study used a series of framing experiments to demonstrate preference reversals. For example, “Imagine that the U.S. is preparing for the outbreak of a disease, which is expected to kill 600 people. Two programs to combat the disease have been proposed. Assume that the exact scientific consequences of the program are as follows:If Program A is adopted, 200 people will be saved. If Program B is adopted, there’s a 1/3 probability that 600 people will be saved and 2/3 probability that no people will be saved.” In expected utility terms the choice is (200*1 = 200 live or 600*0.33 = 200 live).In this case 72% of people chose A.The authors then presented the same issue with the following formulation:“If Program C is adopted 400 people will die. If Program D is adopted there is 1/3 probability that nobody will die and 2/3 probability that 600 people will die.” In expected utility terms the choice is (400*1 = 400 die or 600*0.33 = 400 die)Despite the identical expected values as the previous programs, here 78% chose D.