⋅ Daniel Kahneman (Daniel Kahneman, professor of psychology, particularly with regard to uncertain condition of judgment and decision making research ideas, combining the economic science, was awarded the 2002 Nobel Prize in economics.

Prospect theory

Imagine your friend invites you to play the following game: she is responsible for the flip a coin, which side up you to guess the coin falls.If the COINS face up, you will get a 3 yuan.If the opposite face, you lose three dollars.In this case, the gains and losses, and the incidence of the two kinds of results is 50%, because both sides only coin.Will you choose to play this game?If your friend has changed the rules of the game again, heads the coin you get 5 yuan, on the opposite face is you lose three dollars?In this case, the amount of profit and loss is not the same, but the probability of each outcome was 50% (such asFigure 1).

Imagine, your friend invites you to play another game: she came to throw a normal 6 sided dice.If she throws of arbitrary points 1 to 4 points, you will get a 3 yuan.If she throws 5 or 6 PM, you will lose 3 yuan.In this case, your gains and losses, but the probability of winning or losing is not the same: to win probability is 66%, and the probability of losing is 33%.Would you choose to play the game (such asFigure 2)?

These are some simple games, losses and gains of each are not identical.Now, could you imagine you're sure to profit, only income amount different game situation.For example, if someone is sure to let you select 3 yuan, or 80% probability can get 6 yuan, which would you choose?Or in a situation, if in 3 dollars and two weeks after get immediately make a choice between 10 yuan, what will you choose which?

Prospect theoryIs the above situation, led by my late friend Amos ⋅ trevor and I put together.Prospect theory is aBehavioral economicsTheory, research people in uncertain situations (such as gambling) decisions [1-3], aims to explain the why and how people make decisions.In the following paragraphs, I will introduce two main findings of prospect theory, and explain their meaning and connection with the situation.

When gambling people thinking?

The past view, in considering the results of the risk decision, people will gauge on the impact of financial condition, win or lose.For example, a businessman to the goods, such as perfume from Amsterdam to ship to st Petersburg, he knew the ship on the way there is a 5% chance of sink, unable to reach the destination.Therefore, the businessman is facing two choices.

The ship safety were 95% more likely to reach its destination, in this case, he can sell perfume, expected profits.

The ship sank also has a 5% chance on the way, so businessmen money spent on perfume is going to lose.Therefore, traders need to decide whether to insure the ship's cargo.He should choose to cast protect, after the sinking of the ship with the compensation cost is perfume, or choose not to insure, gamble, hope can ship arrived safely?

Famous scientists ⋅ Daniel Bernoulli (1700-1782), Daniel Bernoulli, studied the problem, he thinks people will consider the future state assets.That is, people in making economic decisions (such as gambling), assessment of winning or losing, respectively is make yourself how financial situation.On this point, Amos and I ⋅ tversky may have a say.We note that, for the risk decision of daily life (usually do not involve big risk trade vessel as mentioned above), people consider the gains and losses, not different results will make them in how the financial situation of [2-4].Recall the aforementioned game: when you choose whether to participate in gambling, you may consider if won will get much money, if lose will lose much money.You probably won't consider in both cases you the change of the amount of pocket money.In other words, people focus on gambling to changes in the financial situation.This kind of situation usually represented in a graph, calledThe value function(e.g.,Figure 3) [2].Before these changes are relative to bet on personal financial situation (known as "zero state") to measure, namely the origin of the coordinate axes in figure 3 to 0.

Loss aversion

Since realized the question that the gambler's financial situation changes, we will have such a question: for the gambler, gains and losses are equally importance?To review againFigure 1In the game.In the first version, the same odds, gains and losses, the people do not like gambling.People prefer to the second version of gambling, income is higher than the value of the loss of value, and the same.To ' ' ' 'compensation, in other words, the risk of loss, need more potential benefits.This can be an important conclusion: people's attitude towards gains and losses are unequal.People's aversion to loss more than desire for revenue, we call this phenomenonLoss aversion[5].

Figure 3Vividly describes the loss aversion.In the figure on the right side of the green curve on behalf of the people the value of giving benefits, on the left side of the red curve contrast, on behalf of the people the value of the loss.Can be seen from the diagram, the yield curve to rise more slowly, more gentle, loss curve is much steeper.That is to say, in the face of the real value of the same gains and losses (such as 3 dollars and lost 3 yuan), the loss of the negative experience will be more than the benefits of positive experience.

You can make a test: can get a 3 yuan excitement over losing 3 yuan of sad?Most people would say, losing 3 yuan's depression is far better than the joy of 3 yuan.The human traits are reflected in many cultures, we believe that it has the basis of the evolution (challenge: from an evolutionary point of view, you can think about the characteristics of this more aversion to loss how to serve the human?).It is important to note that although after our research, people to the understanding of the phenomenon of loss aversion increased, but this kind of psychology has not diminished.These studies, however, allows us to understand the behavior of the people in economic decision-making situation, this is the previous theory fails to explain.

Advice to young readers - two aspect of happiness

Finally, I want to share some important insights in my study career, there is no direct relationship between these insights and economics.The first insights from behavioral psychology, derived from a question: 'what makes people happy?'another opinion from me as a scientist for his own observation.

For each person, happiness is a meaningful and elusive.Everyone is not the same as the path to happiness, depends on many factors.In spite of this, you should realize that there are two types of happiness in the world - in life are happy, and happy to meet for life¹(e.g.,Figure 4.) [6,7].Happy also called instant happiness in life, it is associated with transient experience in life, for example, make oneself happy?My feelings at the moment?This kind of happiness is closely related to our mood., it turns out, on average, people the most happy is and love spending time and love them.

And to the life happy meet also known as life satisfaction, related to the general attitude towards life, for example: I had a success?I'm proud of their achievements?In other words, the degree of satisfaction depends on various aspects do you think of the past life is success or failure².

My advice is, therefore, should think about both the aspects of happiness: how do you prefer to spend every day feel happy in life?What is your aim in life, to the life happy meet)?These two aspects is not always go hand in hand, but if we can focus on the both, then you get both the probability of happiness will increase.Also, note that we found in other studies, the relationship between wealth and happiness is not as simple as people think [8].Therefore, in order to get happiness, I suggest that don't focus too much on the wealth, but more to participate in all kinds of fun activities, setting different goals - don't only focus on economic goals.

Scientists like children, willing to change his mind

For me, being a scientist is like a child, always maintain a high level of curiosity.Scientists, of course, also can't fully understand the world around them, but they really made a great effort, trying to understand the world.As a scientist, I am willing to change their ideas.Some scientists are hard to change the idea, will cling to holding an idea.And I tell them on the contrary, to me, the only change mind to learn new things.From this perspective, the deepening science is a process of constant circulation.' 'alas!I how so silly?Why I didn't think before?' 'moments like this always again and again.This kind of experience to look at things, the scientists everywhere in our life.If you decide to become a scientist, this experience will throughout your life.Even if I have 88 years old, it still happen.

The vocabulary

Prospect Theory (Prospect going):writeStudies of human behavior theory in risky financial decisions, from behavioral economics (a branch of economics).

Behavioral Economics, Behavioral Economics):writeA branch of economics that studies the factors influencing people to make financial decisions.

Function Value (the Value Function):writeDescribe the gains or losses of the relationship between the subjective evaluation and objective value.

Loss Aversion (Loss Aversion):writeThe same earnings is not nearly as attractive aversion to loss.People are reluctant to participate in, for example, the amount and probability of losses and gains are the same gamble.

Conflict of interest statement

The author statement, the study is in no may be interpreted as potential conflicts of interest under the condition of commercial or financial relationships.

Thank you

Thank you forNoa SegevAnd common contributor to interview, this article is based on this interview.Thank you forAlex Bernstein 绘制插图。感谢 ''赛先生'' 公众号及其译者胡唐燕、玛雅蓝对本文中文翻译的贡献。

footnotes

1.writeFor more information, please click here to read: Daniel ⋅ kahneman, moved to California may not be more happy.

2.writeFor more information, please click click read: experience vs the mystery of memory (NPC) of Daniel ⋅ CARDS

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reference

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[7]writeKahneman, d., d. a. Schkade, Fischler, C., a. b. Krueger, and Krilla, a. 2010. "The structure of The well - being in two cities: Life satisfaction and experienced happiness in Columbus, Ohio;And Rennes, France, ' 'inInternational Differences in the Well - Being, eds e. Diener, j. f. Helliwell, and d. Kahneman (Oxford University Press), p. 16-33. Doi: 10.1093 / acprof: oso / 9780199732739.003.0002

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