trendie
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I saw this yesterday, and most here will probably know the jist of the story.
Of how perception, and context alters our sense of value.
Just read that thread about pricing virtual items, and thought of this again.
Decided to post as a separate topic rather than a reply to them.
Anyway, the ideas of value, and context, covers things like sunk cost effects, how value is distorted by time, how we determine value based on comparing to something similar, eg, shopping. Also covers lotteries, and distortion of fear by terrorism (eg, we are shocked by couple of hundred dying in attacks, but when compared to several thousands dying from diabetes, etc, we seem unmoved)
Looking at it from a trading perspective, it might help traders and would-be traders to understand probability, context, and value.
Dan Gilbert: Why we make bad decisions - YouTube
Of how perception, and context alters our sense of value.
Just read that thread about pricing virtual items, and thought of this again.
Decided to post as a separate topic rather than a reply to them.
Anyway, the ideas of value, and context, covers things like sunk cost effects, how value is distorted by time, how we determine value based on comparing to something similar, eg, shopping. Also covers lotteries, and distortion of fear by terrorism (eg, we are shocked by couple of hundred dying in attacks, but when compared to several thousands dying from diabetes, etc, we seem unmoved)
Looking at it from a trading perspective, it might help traders and would-be traders to understand probability, context, and value.
Dan Gilbert: Why we make bad decisions - YouTube
