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Contents  
Foreword by Walter Cronkite  
Introduction - The National Science Foundation at 50: Where Discoveries Begin, by Rita Colwell  
Internet: Changing the Way we Communicate  
Advanced Materials: The Stuff Dreams are Made of  
Education: Lessons about Learning  
Manufacturing: The Forms of Things Unknown  
Arabidopsis: Map-makers of the Plant Kingdom  
Decision Sciences: How the Game is Played
Visualization: A Way to See the Unseen  
Environment: Taking the Long View  
Astronomy: Exploring the Expanding Universe  
Science on the Edge: Arctic and Antarctic Discoveries  
Disaster & Hazard Mitigation  
About the Photographs  
Acknowledgments  
About the NSF  
Chapter Index  
Decision Sciences: How the Game is Played
 

Questioning Utility Theory

Utility theory postulates that it should not matter how alternatives are presented. Once we know what's at stake, and the risks involved, we should have enough awareness of ourselves to make the choice that serves us best.

Questioning Utility Theory - click here for detailsIn fact, psychologists Daniel Kahneman of Princeton and the late Amos Tversky of Stanford demonstrated that the way alternatives are framed can make quite a difference in our choices. In one of their most famous studies, they presented people with a choice between two programs that addressed a public health threat to the lives of 600 people. When the outcomes of the programs were described as (a) saving 200 lives for sure, or (b) a one-third chance to save 600 lives and a two-thirds chance to save no one, most respondents preferred the first option. But when the outcomes were presented as (a) 400 people dying for sure, or (b) a two-thirds chance of 600 people dying and a one-third chance that no one would die, most respondents preferred the second option. Of course, the two versions of the problem are the same, because the people who will be saved in one version are the same people who will not die in the other. What happens here is that people are generally risk-averse in choices between sure gains and favorable gambles, and generally risk-seeking in choices between sure losses and unfavorable gambles. "Some propensities," points out former NSF Program Director Jonathan Leland, "are so ingrained that the trick is to help people understand why their decisions are bad." No one, it seems, is immune to the power of the well-chosen word.

 
     
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Overview
Decisions,Decisions
NSF Lends Support
Into the Laboratory
Practical Payoffs
Polls, Markets, and Allocations
Real-World Decision Making
Questioning Utility Theory
Why We Make Foolish Decisions
The Fruits of Economic Research Are Everywhere
All in a Day's Work
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