Tyrannosaur behind the corner: perception of probability

Some summary from “Thinking, Fast and Slow”

A researcher asks a blonde, how much high is the probability that she will meet a tyrannosaur behind that corner.
- 50 percents, — she responds.
- What do you mean??
- Well, either I’ll meet it, or I will not.

This anecdote came to me while I was reading the chapter on weighting decisions in “Thinking, Fast and Slow”. There is this data on the preferences of people while choosing in a gamble with small money bets, put in a nice chart below:

The attraction of the game isn’t growing in together with the growth of the chance to win, but rather in according to its own algorithms. Combined to other examples of irrationality in making decisions under conditions of uncertainty from the book, this thing shows the difficulty of an average human being in handling the concept of probability. It for sure will happen or for sure will not, anything in between is close to 50%.

Everyone of us acts like the blonde from the story by default. It happens ’cause we do not in fact evaluate the probability (this takes a conscious effort, costly in terms of cognitive energy), but the two possible outcomes and our attitude towards them (that comes easy).

There is a big difference between 0% to win and 1% to win, the jump you can see on a graph. The difference in the chances of 99% and 100% is much more pronounced than between the chance of 80% and 90%. All the time what gets evaluated are the pictures of oneself going away with the prize or empty-handed. In the case of 1% the picture creates irrational hope, with 99% there is an hypertrophied fear of loss. According to the book, people tend to overestimate small probability and underestimate the high chance.

There come the tricks:

• It’s much easier to make people pay insurance and agree for smaller refunds if they want to eliminate the smallest risk, than to talk them out of buying lottery tickets and making weird decisions when they are loosing ground;
• You’re more likely to persuade someone in doing some risky shit if you describe the possible prize in detail. Brighter picture in the mind gets confused with the higher probability to win, et voilà, you got them;
• Saying “there is the 0,0003% of fatal outcome instead of 0,000003%” won’t do the thing. Say “3 people out of 10000 will die, instead 3 out of a million.” Picturing whole people instead of points is much easier.