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Rubinstein2005-page52 - 12:18 34 master Sheet number 50...

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October 21, 2005 12:18 master Sheet number 50 Page number 34 34 Lecture Three and ( d ) Color White Red Green Blue Yellow Chance % 90 6 1 1 2 Prize $ 0 45 45 10 15 In the original experiment, 58% of the subjects in the first group chose a , while nobody in the second group chose c . I presented the two problems, one after the other, to 170 graduate students in New York, Princeton, and Tel Aviv: 43% chose a and 10% chose c . Interestingly, the median response time among the students who answered a was 60 seconds, whereas the median response time of the students who answered b was 91 seconds. The results demonstrate a common procedure people practice when confronted with a complicated choice problem. We often transfer the complicated problem into a simpler one by “canceling” similar elements. While d clearly dominates c , the comparison be- tween a and b is not as easy. Many subjects “cancel” the probabilities of Yellow and Red and are left with comparing the prizes of Green, a process that leads them to choose a . Incidentally, several times in the past, when I presented these
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