Thinking in Bets: Making Smarter Decisions When You Don't Have All the Facts

by Annie Duke

A consistent example of how we price our own happiness relative to others comes from a version of the party game “Would You Rather . . . ?” When you ask people if they would rather earn $70,000 in 1900 or $70,000 now, a significant number choose 1900. True, the average yearly income in 1900 was about $450. So we’d be doing phenomenally well compared to our peers from 1900. But no amount of money in 1900 could buy Novocain or antibiotics or a refrigerator or air-conditioning or a powerful computer we could hold in one hand. About the only thing $70,000 bought in 1900 that it couldn’t buy today was the opportunity to soar above most everyone else. We’d rather lap the field in 1900 with an average life expectancy of only forty-seven years than sit in the middle of the pack now with an average life expectancy of over seventy-six years (and a computer in our palm).