Thinking, Fast and Slow - Daniel Kahneman

eliminate the misconceptions. They devised an elaborate training procedure in which the
participants experienced the roles of both buyers and sellers, and were explicitly taught to
assess their true values. As expected, the endowment effect disappeared. Plott and Zeiler view
their method as an important improvement of technique. Psychologists would consider the
method severely deficient, because it communicates to the participants a message of what the
experimenters consider appropriate behavior, which happens to coincide with the
experimenters’ theory. Plott and Zeiler’s favored version of Kne {ers): tsch’s exchange
experiment is similarly biased: It does not allow the owner of the good to have physical
possession of it, which is crucial to the effect. See Charles R. Plott and Kathryn Zeiler,
“Exchange Asymmetries Incorrectly Interpreted as Evidence of Endowment Effect Theory and
Prospect Theory?” American Economic Review 97 (2007): 1449–66. There may be an impasse
here, where each side rejects the methods required by the other.
People who are poor: In their studies of decision making under poverty, Eldar Shafir, Sendhil
Mullainathan, and their colleagues have observed other instances in which poverty induces
economic behavior that is in some respects more realistic and more rational than that of people
who are better off. The poor are more likely to respond to real outcomes than to their
description. Marianne Bertrand, Sendhil Mullainathan, and Eldar Shafir, “Behavioral
Economics and Marketing in Aid of Decision Making Among the Poor,” Journal of Public
Policy & Marketing 25 (2006): 8–23.
in the United States and in the UK: The conclusion that money spent on purchases is not
experienced as a loss is more likely to be true for people who are relatively well-off. The key
may be whether you are aware when you buy one good that you will not be unable to afford
another good. Novemsky and Kahneman, “The Boundaries of Loss Aversion.” Ian Bateman et
al., “Testing Competing Models of Loss Aversion: An Adversarial Collaboration,” Journal of
Public Economics 89 (2005): 1561–80.
28: Bad Events
heartbeat accelerated: Paul J. Whalen et al., “Human Amygdala Responsivity to Masked
Fearful Eye Whites,” Science 306 (2004): 2061. Individuals with focal lesions of the amygdala
showed little or no loss aversion in their risky choices: Benedetto De Martino, Colin F.
Camerer, and Ralph Adolphs, “Amygdala Damage Eliminates Monetary Loss Aversion,”
PNAS 107 (2010): 3788–92.
bypassing the visual cortex: Joseph LeDoux, The Emotional Brain: The Mysterious
Underpinnings of Emotional Life (New York: Touchstone, 1996).
processed faster: Elaine Fox et al., “Facial Expressions of Emotion: Are Angry Faces Detected
More Efficiently?” Cognition & Emotion 14 (2000): 61–92.
“pops out”: Christine Hansen and Ranald Hansen, “Finding the Face in the Crowd: An Anger
Superiority Effect,” Journal of Personality and Social Psychology 54 (1988): 917–24.