Our Devious Mind on Free Money  E-mail
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Which is the measure of our irrational mind ?

We assume that we are rational beings. However, when we try to apply a logic everyday, we act in the other way.

In game theory, Nash demonstrated there's no way to achieve a good decision without proper information.

From Taleb's "Black Swan" book, evolution hardwired our brain to avoid complex logic "to automatically interpret things, to simplify the complex, to theorize and categorize in order to make sense of information".

Now, a scientific study (PNAS 10.1073/pnas.0900636106)  demonstrates in a game that, even if we have all the information and a clear rational proposition, we are not able to choose the right decision, and we are driven only by our emotions.

Examples of the game:

  • If someone offers you to share free money, on even proportions, 50% you are not going to accept it.
  • If someone offers you to share free money, on un-even proportions, 70% you are not going to accept it.
  • Knowing that the offering person is going to keep it, 40% you are not going to accept it.
  • To be clear: "if A chooses X and B chooses Y, then A receives $i and B receives $j", same rates

The conclusion:

  • We think an offer is unfair
  • After the decision, we can try to rationalize it
  • We act on our snap decisions without thinking

Our Irrational Mind on Free Money

Source: PNAS 10.1073/pnas.0900636106 and ArsTechica Irrational markets: people reject free money out of anger.

 

Comments (2)
1 Tuesday, 30 June 2009 20:55
Hernan
Siempre confío en las personas, en su capacidad lógica aunque sé que rara vez la utilizan... pero no sé si comprendo bien el ejercicio planteado... lo charlaremos.... ¿estás dando plata gratis? jajaja...
Usualmente, solo registramos la informacion que concuerda con nuestro punto de vista.http://arstechnica.com/science/news/2009/07/study-people-avoid-viewpoints-that-conflict-with-their-own.ars  75% seleccionamos material que esta de acuerdo a su punto de vista, y no contradice con sus convicciones previas.

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Last Updated ( Saturday, 08 August 2009 00:31 )
 

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