Once again, Richard Thaler provides an interesting academic experiment to demonstrate this concept. In his study he started with two groups of people. People in the first group were given $30 in cash and told they had two choices: (1) pocket the money and walk away, or (2) gamble on a coin flip in which if they won they would get $9 extra and if they lost they would have $9 deducted. Most (70 percent) took the gamble because they figured they would at the very least end up with $21 of found money. Those in the second group were offered a different choice: (1) try a gamble on a coin toss: if
...more
