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even when presented unemotionally, people fall victim to this when asked this question:
"I will flip a special coin 100 times. This coin has the property of coming up heads 70% of the time and tails 30% of the time. Before each flip you will guess heads or tails. You will receive 1$ for each successful guess. How should you guess?"
The correct answer is to guess heads 100 times, but people often say to guess heads 70 times and tails 30 times.
"In another example of near-total neglect of probability , Rottenstreich and Hsee (2001) found that the typical subject was willing to pay $7 to avoid a 1% chance of a painful electric shock, and $10 - only a little more - to avoid a 99% chance of the same shock. (They suggest that probability is more likely to be neglected when the outcomes are emotion arousing.)" As currently written, this seems to be a "duh" response. If someone is willing to pay $7 to avoid a 1% chance, paying less than $693 to avoid a 99% chance is a bargain. Perhaps this needs to be rephrased, but the current way it's phrased only proves that people are willing to pay less than the maximum amount they'd accept... a trivial principle of economics Eoseth (talk) 04:49, 10 June 2008 (UTC)
I took a stab at this by changing the order of the sentence. Paying $10 for 99% and $7 for only 1% is an egregious violation of the same economic principle (paying $7 when it should be only worth about $0.10). I am not sure if this properly represents the study, though, so it might need another look. Primalmoon (talk) 12:54, 23 January 2011 (UTC)