In 1963, Samuelson asked a colleague if he would be willing to accept the following bet: a 50 percent chance of winning $200 or a 50 percent chance of losing $100. The colleague politely turned down the bet but then announced he would be happy to play the game 100 times so long as he did not have to watch each individual outcome. That counterproposal sparked an idea for Thaler and Benartzi. Samuelson’s colleague was willing to accept the wager with two qualifiers: lengthen the time horizon for the game and reduce the frequency in which he was forced to watch the outcomes. Moving that
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