- 9th Graders are finishing up the “Urban Infrastructure” and “Access to Clean Water Project”.
- 10th Graders are working on several projects at once in preparation for a big project kick-off coming soon.
- 11th Graders are working on the Civics Projects now that the “Nuclear Proliferation Project” is completed.
- 12th Graders are working with our Business Partners to analyze data for the “Bioethics Project”.
- 13th Graders are putting finishing touches on their Internship Projects for their upcoming Symposium.
- Special Note for 10th Graders – November 7th all 10th grade students will participate in the Pre-ACT Test at Cherry for the entire morning. More information will be forthcoming, but this is for all 10th graders.
Shaping Our Future
Are you of age to vote? If so–do so. It is our civic responsibility to cast a ballot and partake in our future. If you are 18 years old, and you are not planning voting, then you must not care about the future of this country-and no matter your political affiliation, there should always be something that you want to change. Voting is the easiest thing to do to advocate for your beliefs. In the Talley Student Union, there is Early Voting until November 3rd. If you’re impatient like I am, I would recommend going to this site, or another Early Voting site to avoid the lines. When I voted, I didn’t have to wait at all. For those of you who are not registered to vote– you’re not off the hook just yet. If you decide that you want to vote and you are not registered, you can register and vote on the same day. This is called One-Stop Voting. You register at your Early Voting site of choice, and vote after. You can only do this during the Early Voting period, otherwise, you’ve missed your chance to change your future.
Are you 16 years old? Pre-register to vote. Pre-registering to vote is so easy. This was the route that I chose because, again, I’m lazy. I didn’t have to worry about registering to vote when I turned 18 because it automatically considered me an active voter. This process made the actual voting a lot less stressful and without any difficulties.
Are you not of age to vote? That’s okay! Pay attention this upcoming year, because the presidential primaries are afoot. This political “March Madness” is significant and it’s important to stay informed even if you are not of age to cast a ballot.
Do you remember the survey I asked you to fill out last week? It was a survey that asked simple preference questions. This was for my NCSU English 101 class and my essay/results are down below. This is the kind of work that you may be expected to complete when you are enrolled at NC State.
Prospect Theory is a phenomenon that was discovered and researched by Amos Tversky and Daniel Kahneman. This theory attempts to explain why humans perceive risk being more significant versus the significance of a gain (Kahneman & Tversky, 1992). Prospect Theory is one of many behavioral theories stemming from behavioral economics. Understanding decision making is important in business, politics, and any other situation that requires persuasion. From 1979 to 1992, Kahneman and Tversky wanted to produce a more accurate understanding of decision making when compared to expected utility theory. During their research, Kahneman and Tversky posed the same question, but framed it in two different ways. 155 participants were told to assume that there was a disease and that it would affect 600 people, and the participants had the following choices:
- Treatment A: 200 out of the 600 will be cured
- Treatment B: there is a 33% chance that all 600 people will be saved and a 66% chance that no one will be saved
After these questions were posed, 72% of the participants chose choice A while the other 28% chose choice B . Then, Kahneman and Tversky offered participants another choice:
- Treatment C: 400 out of the 600 will die
- Treatment D: there is a 33% chance that no one will die, and a 66% chance that all 600 people will die
In this circumstance, 22% of the participants selected choice c to avoid losing 400 people, while 78% chose choice D; however, we can see how the framing of these question makes a difference. Treatment A and Treatment C are the same idea and Treatment B and D are the same, but all four framed differently.
Coinciding with Prospect Theory, is Framing Effect. Framing Effect explains how something can be worded differently in order to draw more people to it, or conversely, sway people away from it (Levin, Schneider & Gaeth, 1998). Similarly, in a Crash Course Economics YouTube video, there are simple examples of Prospect Theory and Framing Theory being used together, like how a steak was advertised as being “75% Fat Free” versus “25% Fat,” they both mean the same thing, but one choice, for some reason is more appealing (CrashCourse, 2018). In the same video, lottery tickets were advertised as “1 in every 100 is a winner” versus “999 losers.” As a consumer, it would seem irrational to purchase a ticket that explicitly states how many losers there are in a drawing, but there is a more likely chance that you will purchase a ticket that emphasizes your chance at winning. Prospect Theory is present in politics as well, it’s a form of persuasion that companies and politicians alike utilize to gain your business or gain your vote. In politics, you may see a bill titled “Improve our schools.” This proposition is a no brainer–of course we want our schools to be improved; however, when the same bill is proposed as “Raise our taxes,” less people will be inclined to affirm this bill (CrashCourse, 2016). My purpose with my research is to observe Prospect Theory using a survey of my peers and within a gambling setting with my friends.
Methods and Materials
My first attempt to observe Prospect Theory was using a survey tool on Google Forms. Using this survey, I hoped to learn more about the decision making habits of the students in my high school and university community. I used my high school newspaper as my initial platform for my survey, and to increase response rate and I also posted a link to the survey to NC State University Reddit. I chose these two audiences because I predicted that they would produce a balanced response rate to yield accurate results. The high school students may be more susceptible to the effects of the framing of the questions, while NC State students may think about their answers more logically. The questions on my survey were presented in a random order as to avoid a connection between questions that the participant may try to make. The questions on my survey were as follows:
- Prompt: Imagine you can control a rapid disease engulfing a small town. 600 people in this town are susceptible to this fatal illness. You have two choices (Kahneman & Tversky, 1992).
- 200 out of the 600 will be cured
- There is a 33% chance that all 600 people will be saved and a 66% chance that no one will be saved
- Following the same prompt from above, you are given two more choices:
- 400 out of the 600 will die
- There is a 33% chance that no one will die, and a 66% chance that all 600 people will die
- Would you eat a steak that is 25% Fat Free (CrashCourse, 2016)?
- Would you buy a pair of shoes for $69.99?
- Would you vote for a bill titled “Improve Our Schools (CrashCourse, 2016)?”
- Would you play in a lottery where the odds were 1 out of 1000 players is a winner (CrashCourse, 2016)?
- Would you eat a steak that is 75% Fat (CrashCourse, 2016)?
- Would you buy a pair of shoes for $70.00?
- Would you vote for a bill titled “Raise Our Taxes (CrashCourse, 2016)?”
- Would you play in a lottery where the odds were 999 losers (CrashCourse, 2016)?
I sent this survey out on the student newspaper at approximately 4:00 pm on Wednesday, October 24, 2018. At approximately 9:00 pm that same day, I posted a link to this form on the NC State University Reddit page. By the following morning, I had received 85 responses. At 9:45 am on Thursday, October 25, I closed the survey so that I would no longer receive any responses.
In my study, I found that participants did not support Kahneman and Tversky’s Prospect Theory.
My initial hypothesis before sending out the survey was that my participants would overwhelmingly adhere to Kahneman and Tversky’s Prospect Theory. This was my prediction because I think that the way propositions are worded greatly affect the results, I believed that it would be easy to entice a certain answer based on the contents of the question. Because of this, I attempted to utilize a technique that distracted the participant from what the question was actually asking. For example, I randomized the order of the questions so that they seemed unrelated. I posed the question related to shoes after the question about the lottery, following the question about a bill to improve schools. If the related questions were in consecutive order, the participant would have easily made the connection that the questions were the same but framed differently. Despite this attempt, I do not think that it made a difference in my results. Due to the length of the survey, it was not difficult to conclude that many of the questions were the same. There is a considerable possibility that a participant was able to notice that the questions were the same, and this may have led a few participants to change their answers.
Conversely, the participants may not have fit in the Prospect Theory or Framing Effect because the questions were framed too differently. In my survey, I proposed two questions that were supposed to be related: a bill to improve schools and a bill to raise taxes. Although technically improving schools may imply raising taxes, it is possible that a participant does not know this is how schools are funded or there may be a designation of funds in a different way.
Another possible reason that this study found that participants did not support Prospect Theory is that the participants did not feel a sense of loss based on the questions that they answered. The questions that I posed about the lottery may not have provoked the sense of fear associated with loss because the severity of the hypothetical was not astringent enough. In a future study, I would instead pose a question relating to receiving $50 from one friend and ask them to consider their level of happiness on a scale from one to ten. In relation, I would present the scenario of receiving $100 from another friend, but losing $50 of that $100 and then asking again their happiness from one to ten (CrashCourse, 2016). I think that this would have been a more accurate question to test for prospect theory rather than the lottery proposition because a lottery ticket is, subjectively, inexpensive– so buying a $1-2 ticket where there are 999 losers does not seem like a considerable loss.
Additionally, my target audience may have produced a different result than the overall population. Being that I sent the survey to an advanced high school and an engineer abundant university, it is very likely that my participants were much more logical than the average person. Since many of my questions relied on integers and percentages, it may have been obvious that the questions were the same– this would skew data because the Framing Effect did not have an affect on my participants. If I were to re-attempt this study, I would be more challenging and qualitative in my questions, and attempt to be less obvious that the questions were related. I would also include a fewer number of questions that have to do with integers or numbers as to avoid the possibility of someone thinking logically based on mathematical calculations.
CrashCourse. (2016, March 12). Behavioral Economics: Crash Course Economics #27
[Videofile].Retrieved from https://www.youtube.com/watch?v=dqxQ3E1bubI
Levin, I. P., Schneider, S. L., & Gaeth, G. J. (1998). All frames are not created equal: A
typology and critical analysis of framing effects. Organizational Behavior and
Human Decision Processes, 76, 149-188.
Sanlam Investments (2016, May 13). Prospect Theory (explained in a minute) – Behavioural
Finance [Video file]. Retrieved from https://www.youtube.com/watch?v=sM91d5I36Po
Staff, Investopedia. (2018, April 11). Prospect Theory. Investopedia. Retrieved October 22,
Tversky, A. & D. Kahneman. (1981). The framing of decisions and psychology of choice.
Levin, I. P., Schneider, S. L., & Gaeth, G. J. (1998). All frames are not created equal: A
typology and critical analysis of framing effects. Science. 76, 149-188.