Weekly insights on how to perform when it matters | High-stakes decisions. Real situations. No BS. | 👇JOIN +2k readers 👇
Which of these two options would you choose?
|
Daniel Kahneman, the author of Thinking, Fast and Slow, did an experiment. He gave two options: Would you accept a gamble that offers a 10% chance to win $95 and a 90% chance to lose $5? Or. Would you pay $5 to participate in a lottery that offers a 10% chance to win $100 and a 90% chance to win nothing? Well… if you studied engineering, you have convinced yourself that the two problems are identical. In both, you are either richer by $95 or poorer by $5. But that’s engineering mindset… No question why we take so long to find someone that can endure us. The reality is that the second option attracts more people. A bad outcome is much more acceptable if it is framed as the cost of a lottery ticket that did not win than if it is simply described as losing a gamble. We should not be surprised: losses evoke stronger negative feelings than costs. If you have no idea what I’m talking about, you should take a look to the book below. It will teach you to avoid gambles and call some costs, investments.
PD 1: If you liked this email, don't keep it in secret and forward it to a friend. They will thank you enormously one day. PD 2: If somebody has sent you this email and you want to receive emails like this yourself, visit vicentevalencia.com PD 3: If you want unsubscribe, click the link below. |
Vicente Valencia
Weekly insights on how to perform when it matters | High-stakes decisions. Real situations. No BS. | 👇JOIN +2k readers 👇
Imagine two houses. The first has a beautiful kitchen. Italian marble. Designer bathrooms. And a motorway running 20 metres from the bedroom. The second has an ugly kitchen. Terrible paint. And bathrooms that haven't been touched since 1987. But it's in a fantastic location. Which one would you buy? Unless you have a particular affection for motorway noise, probably the second. Applying the following concept is where you make the money. You can replace a kitchen. You can repaint the walls....
January 1879 The British Army invaded Zululand. You’ve probably watched the movie or you know the story. The pirates had rifles. Artillery. Professional soldiers. And a commanding officer called Lord Chelmsford. A man who was remarkably confident in British military superiority. Unfortunately for the British, the Zulus hadn't been informed of their inferiority. Chelmsford established a camp. Standard military practice required defensive precautions. Entrenchments. Protected positions. A...
Ah, November… time of elections… Promises… and of course… rush to solve problems untouched during 3 or 4 years. This time, it was January. 2022. India. A politician inaugurated a bridge. Just before the elections. Beautiful ceremony. Speeches. Cameras. Smiles. Although… as usual in pre-election times… there was one minor inconvenience. The bridge wasn't finished. The approaches… the same. But the ribbon? Ohh… my friend. Perfectly red. Perfectly cut. A steering committee to choose the perfect...