Asian Disease Problem UP097
In 1981, Amos Tversky and Daniel Kahneman demonstrated reversals systematic of preference within behavioral economics when the same problem is presented in different ways, for example in the Asian Disease Problem.
Participants were asked to "Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people”. Two alternative programs to combat the disease have been proposed, assume that the exact scientific estimates of the consequences of the programs are as follows.
1. If Program A is adopted, 200 people will be saved.
2. If Program B is adopted, there is 1/3 probability that 600 people will be saved and 2/3 probability that no people will be saved.
72% of participants preferred program A (the remainder, 28%, opting for program B).
1. If Program C is adopted, 400 people will die.
2. If Program D is adopted, there is 1/3 probability that no people will die and 2/3 probability that 600 people will die.
In this decision frame, 78% preferred program D, with the remaining 22% opting for program C.
Programs A and C are identical, as are programs B and D. The change in the decision frame between the two groups of participants produced a preference reversal: when the programs were presented in terms of lives saved, the participants preferred the secure program, A (= C). When the programs were presented in terms of expected deaths, participants chose the gamble D (= B).
Participants were asked to "Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people”. Two alternative programs to combat the disease have been proposed, assume that the exact scientific estimates of the consequences of the programs are as follows.
1. If Program A is adopted, 200 people will be saved.
2. If Program B is adopted, there is 1/3 probability that 600 people will be saved and 2/3 probability that no people will be saved.
72% of participants preferred program A (the remainder, 28%, opting for program B).
1. If Program C is adopted, 400 people will die.
2. If Program D is adopted, there is 1/3 probability that no people will die and 2/3 probability that 600 people will die.
In this decision frame, 78% preferred program D, with the remaining 22% opting for program C.
Programs A and C are identical, as are programs B and D. The change in the decision frame between the two groups of participants produced a preference reversal: when the programs were presented in terms of lives saved, the participants preferred the secure program, A (= C). When the programs were presented in terms of expected deaths, participants chose the gamble D (= B).