X-Message-Number: 27716 References: <> From: David Stodolsky <> Subject: Re: Fear of a strange future Date: Thu, 16 Mar 2006 12:54:34 +0100 On 15 Mar 2006, at 07:06, marta sandberg wrote: > One of those answers is fear of a strange future and lots of people > have > said that I am brave because I have chosen cryonics. Fear of the future and love of the "Good old days" results from the perceptual bias of "framing" among others: http://prospect-theory.behaviouralfinance.net/ Prospect theory, which was developed by Kahneman and Tversky (1979), is one of the most often quoted and best-documented phenomena in economic psychology. The theory states that we have an irrational tendency to be less willing to gamble with profits than with losses. Tvede (1999) "A theory that incorporates such framing effects has been proposed by Kahneman and Tversky (1979). Termed prospect theory, it has been extraordinarily influential. It is based on the idea that people evaluate gains or losses in prospect theory from some neutral or status quo point, an assumption consistent with the adaptation-level findings that occur not just in perception but in virtually all experience. That is, we adapt to a constant level of virtually any psychological dimension and find it to be neutral. In a similar way, we adapt to the reduced light in a movie theater when we enter it finding it not particularly dark after a few seconds and then readapt to the much brighter light outside when we leave the theater finding it not to be unusually bright after a few seconds. But since choice varies by framing it as a gain or a loss, it cannot reveal underlying preferences." Dawes (2001) p 195 "Unlike expected utility theory, prospect theory predicts that preferences will depend on how a problem is framed. If the reference point is defined such that an outcome is viewed as a gain, then the resulting value function will be concave and decision makers will tend to be risk averse. On the other hand, if the reference point is defined such that an outcome is viewed as a loss, then the value function will be convex and decision makers will be risk seeking." Plous (1993) p 97 "Prospect theory also differs from expected utility theory in the way it handles the probabilities attached to particular outcomes. Classical utility theory assumes that decision makers value a 50 percent chance of winning as exactly that: a 50 percent chance of winning. In contrast, prospect theory treats preferences as a function of decision weights, and it assumes that these weights do not always correspond to probabilities. Specifically, prospect theory postulates that decision weights tend to overweight small probabilities and underweigth moderate and high probabilities. Plous (1993) p 98 "Prospect theory represents a great improvement over classical expected utility theory. Indeed, many violations of expected utility theory are explicitly predicted by prospect theory." Plous (1993) p 105 "In a nutshell, prospect theory assumes that investors' utility functions depend on changes in the value of their portfolios rather than the value of the portfolio. Put another way, utility comes from returns, not from the value of assets." Cornell (1999) http://www2.sjsu.edu/faculty/watkins/prospect.htm > > Of course, the future is perceived as even more frightening if all > your > friends and relatives will be dead when/if you wake up. > > Let me add one more thing. Somehow or other, people perceiver the > future as > even more frightening because you are not SURE you will actually > wake up. > > Go figure. Uncertainty and anxiety are proportional. The main point is that a 'rational' argument (based upon the economic man assumption) alone, will not result in an appropriate choice. dss David Stodolsky Skype: davidstodolsky Rate This Message: http://www.cryonet.org/cgi-bin/rate.cgi?msg=27716