Dan Ariely has posted an intriguing offer on this blog recently: buy his second book, and enter to win dinner with him. I can hardly resist! Again, I started commenting on the post, but got a little carried away:
This is priceless! I’m half considering buying a second copy just for the chance to have dinner with Dr. Ariely. I’m finding it very difficult to calculate the expected cost benefit here: immeasurably large reward * infinitesimal probability – cost of buying a copy > 0 ???
Back to reality: People have a very hard time reasoning about probabilities. One example of this is the Monty Hall Problem, named after host of the American game show Let’s Make a Deal. I have to admit, I find this problem very difficult to correctly analyze, even though I know the correct solution!
The basic scenario is this: You are presented with three doors. Traditionally, there is car behind one of the doors, and a goat behind each of the other two. Your job is to choose which door to open, revealing the prize. Now, suppose you’ve chosen one of the doors, but before it is opened, the host reveals that one of the other doors is hiding a goat. You are then given a second choice: you can open the door you originally chose, or switch. Which of the two remaining doors maximized your probability of driving away in a new car?
I won’t spoil the ending for those who want to solve this puzzle for themselves, but the fact that most people have a difficult time arriving at the correct solution shows that we are quite bad at reasoning about probabilities. That being the case, how can we possibly do a good job deciding in real-life scenarios, which tend to be much more complicated?
If by some happy accident, we usually end up making the right choices in cases involving uncertainty, this leaves many questions about how we decide unanswered. If not by sound reasoning, what strategies do we use to arrive at the choices we make? If those strategies lead us to behave rationally much of the time, yet we are not thinking rationally (e.g. heuristics may play a big role, even when they have no logical basis), how should we regard the statement “humans are rational beings”? Sorry to go off on a philosophical tangent, but I find such questions fascinating.