Psychology
Whether it’s to do with Lotto or an unknown disease, we humans are only too ready to reveal our irrational natures.
Whether it’s to do with Lotto or an unknown disease, we humans are only too ready to reveal our irrational natures.
Saturday, February 29, was the day of the $50 million must-be-won Lotto jackpot. Even though the bigger the potential first prize, the more people you are likely to share any winnings with, punters queued up around the corner to grab a ticket. The odds of winning Powerball are about one in 38 million, but they’re not the kind of probabilities we are good at understanding.
Sure, we know these odds are very, very small and that the odds of any particular combination of numbers coming up are identical. But what if I asked you to swap your ticket with mine?
This is the fun premise of a 1996 research article by Maya Bar-Hillel of the Hebrew University of Jerusalem and Efrat Neter of Ruppin College, also in Israel. I give you a pen, then I offer you my effectively identical pen and even throw in a fancy chocolate for good measure. Nine out of 10 of Bar-Hillel and Neter’s research subjects opted for the exchange. But what if it’s a Lotto ticket? Fewer than half of the subjects thought it a good idea, even though they were just as likely as those who handed their tickets over to say they had an equal chance of winning. Why, then, were those people so uncomfortable with the idea of ticket switching?
The reason is that we anticipate regret at missing out if our ticket were to be the winner. This is related to the idea of loss aversion developed by Nobel Prize-winning psychologists Daniel Kahneman and Amos Tversky. A bird in the hand is worth two in the bush, in other words.
The same day as the Lotto draw, people were queuing up to buy groceries at the supermarket. Ironic, really, as I wasn’t feeling at all panicky about Covid-19 until I saw other people freaking out. What do they know that I don’t?
Probably nothing, as it happens – we’re all in the dark – but that is part of the reason we’re freaking out.
I’ve asked people why they think there has been panic buying. Their answers, tested against what we know about the ratherunderdeveloped psychology of pandemics, suggest it is because Covid-19 represents an unknown and we’re much more uncomfortable about threats that are novel or new.
Have you signed up for your annual flu shot yet? By now, in the frenzied coverage of Covid-19, you’ll have learnt that even for the “common” flu, about one in 1000 people die worldwide. We don’t know yet what the mortality rate for Covid-19 is, but we worry that it’s higher. In that context of uncertainty, we worry more and look to each other for how worried we should be.
In one of Kahneman and Tversky’s famous studies, they asked us to imagine that we’re preparing for an “unusual Asian disease” that is likely to kill about 600 people.
Two alternative programmes to combat the disease have been proposed, one in a positive frame and one in a negative. In the positive frame, option A will result in 200 people being saved. Option B will result in a one-third probability that 600 people will be saved and a twothirds probability that no people will be saved.
In the negative frame, option C will result in 400 deaths; in option
Option B will result in a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved.
D there is a one-third probability that nobody will die and two-thirds probability that 600 people will die.
All four options have the same expected value: 200 lives saved and 400 lives lost. Further, options A and C are equivalent in terms of possible outcomes, as are options B and D. Despite this equivalence, participants responding to the positive frame chiefly chose option A, or the certain option (72%); those responding to the negative frame predominantly chose option D, or the risky option (78%).
As with lottery tickets, we see loss aversion, but the frame makes a difference as well.
Two very different queues for two very different reasons. It would be ironic if you caught the flu standing in one of them.