You are defining rational behavior as ignoring variance and accepting expectation as a gauranteed outcome for a trial.
I don't want to be a jerk, but you are wrong to a phenomenal degree.
I don't want to be a jerk, but you are wrong to a phenomenal degree.
Cumulative Prospect Theory takes this into account and states that people tend to overweight extreme, but unlikely events, but underweight "average" events, but I digress
I was just trying to show the base irrationality of the human mind. Here's another example. Consider you have two offers for the New York Times:
[A] $59 – Internet Only Subscription $125 – Internet and Print Subscription
[B] $59 – Internet Only Subscription $125 – Print Only Subscription $125 – Internet and Print Subscription
Both offers are the same, with the exception of including the “print only” subscription in Offer A. Despite the fact that not a single person chose that unattractive offer, its impact was dramatic – In a study, 62% more subjects chose the combined print and Internet offer, and predicted revenue jumped 43%. The print-only offer was the decoy, and served to make the combined offer look like a better value. This is called decoy marketing and is only one of an arsenal of tools that is used to take advantage of the irrational mind. You'll see this everywhere so it pays to identify it.