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The Sure-thing Principle

Ever feel like everyone on the planet is irrational? That may be only a slight exaggeration. Hundreds of studies have demonstrated that even well-educated people often fail to follow standards of reasoning. One example is the sure-thing principle.

It goes like this: If you prefer prospect A to prospect B if a possible future event X happens, and you prefer prospect A still if future event X does not happen, then you should prefer prospect A despite having no knowledge of whether or not event X will happen.

Sounds simple enough, and yet when people encounter this principle in concrete scenarios, they often defy rationality. For instance, there's a game called prisoner's dilemma in which two players must decide whether to cooperate or to defect, without knowledge of what the other player, a stranger, will do. Each player stands to lose or gain money, and the amount could be small or large depending on the two players' combined moves.

The most rational strategy is to defect because it involves the least risk. In fact, when players were actually told what the other player would do, the majority of participants chose to defect in either case, whether that other player cooperated or defected. That is, participants agreed that to defect is the best choice, no matter what that other player does. They prefer prospect A to prospect B whether or not event X happens.

However, when subjects didn't know what the other person would do, a number of them went against rationality and chose to cooperate rather than defect.

It's irrational, and yet it's representative of how the majority of us think.

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