{"id":122,"date":"2008-05-03T01:55:10","date_gmt":"2008-05-03T08:55:10","guid":{"rendered":"http:\/\/www.useriscontent.com\/blog\/?p=122"},"modified":"2024-03-29T17:13:25","modified_gmt":"2024-03-30T00:13:25","slug":"daniel-kahneman-a-bat-and-a-ball-cost-110","status":"publish","type":"post","link":"https:\/\/www.useriscontent.com\/blog\/2008\/05\/03\/daniel-kahneman-a-bat-and-a-ball-cost-110\/","title":{"rendered":"Daniel Kahneman – A Bat and a Ball Cost $1.10"},"content":{"rendered":"

\"Daniel<\/a>RIP Danny. Thank you for your insights and stories. I'm glad of the opportunity to know your work. You made a difference.<\/p>\n

[Update 9\/8\/2010 A paper Danny co-authored, \"Income's Influence on Happiness\" has just been released<\/a>.]<\/p>\n

… the bat costs $1 more than the ball. How much does the ball cost? Daniel Kahneman KNOWS that the first thought that entered your head was $.10\u2013even if you're a Computer Science major at MIT. But that's the wrong answer.<\/p>\n

Daniel Gilbert's \"Stumbling On Happiness<\/a>\" led me to Nicholas Taleb's \"Fooled By Randomness<\/a>\". Both books cite the work of Danny Kahneman. I blogged a bit about him here<\/a>. I have been rummaging around the internet looking for whatever I can find on Danny and his work and have come up with some excellent content. But let me give you a taste of the sort of fascinating facts you'll hear in Danny's lectures first.<\/p>\n

In a study Danny (I don't know him personally but after listening to all these lectures, I feel as though I do. He could no doubt name the cognitive bias this suggests) mentions in one of his talks, people are asked how much pleasure they derive from their car. They are then asked enough questions about the car to determine its blue book (resale) value. It turns out that there IS a correlation between the amount of pleasure the subject reported and the dollar value of the car. i.e. Yes, that late model BMW in the garage DOES give you more pleasure than my 20 year old Honda would. BUT! They then go on to ask the subject if they find their commute to work pleasurable, and guess what?\u2013 nobody does!. It turns out that the ONLY time people derive pleasure from their car is when they are THINKING about it.<\/p>\n

From Wikipedia:
\nWith Amos Tversky<\/a> (Kahneman's longtime research partner, with whom he would have shared the Nobel prize had Tversky not died in 1996) and others, Kahneman established a cognitive basis for common human errors using heuristics<\/a> and biases (Kahneman & Tversky, 1973, Kahneman, Slovic & Tversky, 1982), and developed Prospect theory<\/a> (Kahneman & Tversky, 1979). He was awarded the 2002 the Nobel Prize in Economics<\/a> for his work in Prospect theory<\/a>.<\/p>\n

Major Contributions:<\/p>\n