Wednesday, January 26, 2005

prospect theory and fantasy sports.

i'm reading "the paradox of choice" and just came across this very interesting paragraph on prospect theory:

..suppose you are one of a large group of participants in a study and for your time and trouble, you are given either a coffee mug or a nice pen. the two gifts are of roughly equal value and randomly distributed - half of the people in the room get one, while the other half get the other. you and your fellow participants are then given the opportunity to trade. considering the random distribution, you would think that about half the people in the group would be gotten the object they preffered and that the other half would be happy to swap. but in fact, there are very few trades. this phenomenon is called...

before i go on, anyone have any ideas why? post a comment if you do.

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