Think about which you would choose: 1: You decide to go to a show downtown that will cost $40. One of two things happens... - You pay $40 for an advance ticket online. You get to the show and realize that you've lost the ticket on the way to the show.
- You decide to buy your ticket at the ticket window. When you arrive, you realize that you've lost two $20 bills somewhere along the way to the show.
Question: Do you pay $40 for a ticket at the window?In both outcomes, you're out $80. No difference there... In the first circumstance, by a 2 to 1 margin, people will not buy the ticket at the window. In the second circumstance, by a 2 to 1 margin, people will buy the ticket at the window. 2: You have no money. But you get money in one of the following ways... - I give you $30, and then tell you that if you let me flip a coin, heads will give you another $9 and tails will cost you $9.
- I tell you that if you let me flip a coin, heads will get you $39, tails will get you $21, or I can just give you $30 with no coin flip at all.
In both outcomes, you stand to make the same money. No difference there...In the first circumstance, 70% of people will opt for the coin flip. In the second circumstance, 57% of people will not opt for the coin flip. This is called prospect theory. This way in which we frame our decisions for perceived risks is illogical. But we humans have a sense of accounting in our heads that bring about such "failure of invariance," as it's called. Logically, there should be no variance in our answers since the outcomes bring about the same result. But we fail to be steady in our analysis. I'll give you a scenario of my own, but with only anecdotes and not statistics. 3: A fifty-year-old man and his family are rich. He has a net worth of $50 million and lives in a big mansion and drives nice cars. He got his money by either... - Starting a small business when he was young, working hard and building relationships and sacrificing.
- Purchasing a winning Powerball lottery ticket for $1.
In both outcomes, the amount of money is the same. No difference there...In the first circumstance, some people will vilify the man for his riches. In the second circumstance, no one will vilify the man for his riches. Think about that... the people who pour hatred on "the rich" exclude lottery winners from their loathing. Why is that? Is it because one is earned over years of hard work through capitalism and the other acquired in two minutes of dumb luck through the government? Which one deserves praise and celebration? And liberals somehow think they're the enlightened ones... | 
