100 Mental Models 9 Prospect Theory

An experiment by Harvard social psychologist Ellen Langer proves that humans also have fixed behavior patterns similar to those of animals. One of the well-known rules of conduct is that when we ask someone for help, we are more likely to get help if we can give a reason. The reason is simple, people just like to find an excuse for what they do.

Lange found that the real reason was not in the words that were too much, but in the word "because". Just as the "squeak" of a turkey (even if it is from the weasel mark itself) can elicit a maternal response from a mother turkey, the word "because" also triggers a knee-jerk submissive response, even if the word "because" does not follow it to give them a reason for compliance.

1) The principle of reciprocity will cause unfair exchanges, and the grace of a drop of water will be reciprocated.

2) Because people who are inconsistent in their beliefs, words, and deeds will be seen as unreliable, inconsistent, and even mentally ill. On the other hand, a high degree of consistency in words and deeds means that a person is trustworthy, reliable, and honest. Therefore, in order to be consistent, we will fulfill our commitments.

Even if it is against your will, the path you choose will be completed on your knees.

3) Social Proof: We refer to the behavior of others to decide what behavior is right for us, especially when we think those people are similar to us.

5) The world is very complex, and humans have adapted to obey authority in the process of evolution, because failure to obey authority will make itself obsolete. There are three types of authority: political authority, academic authority, and empirical authority. Three symbols: title, clothing, and identity symbols.

6) Scarcity: Scarce is expensive.

Summary A truly influential person, will grasp the strength of different principles, balance the relationship between multiple parties, and adopt different strategies at different stages, in order to really influence others, just knowing is not enough, everyone faces different situations, only continuous practice and reflection, in order to truly make others willingly obedient, of course, we must always maintain a moment of kindness, because people can lose everything, only kindness cannot.

For the same problem, two logically similar statements will lead to different decision-making judgments, a phenomenon called framing effect.

To put it simply, when you describe the same thing, different expressions will give the listener different feelings, so that the listener has two diametrically opposed decisions.

Classification of Frame Effects:

1) Risk selection framework.

2) Feature framework.

3) Purpose framework.

People who are mathematically strong and good at thinking will be less affected by some framing effects.

Ask some questions to identify the framework:

1) Is there a framework for the order in which the questions are presented?

2) Is the question from the point of view of gain or loss?

3) Is the question open-ended or closed?

4) Does the question contain some purpose?

5) Is the question filtered?

6) Is the question framed positive or negative?

The study of behavioral economics starts from the empirical evidence, people's own psychological characteristics, and behavioral characteristics to reveal the irrational psychological factors that affect the choice behavior, and behavioral economics emphasizes that people's behavior is not only driven by interests, but also affected by a variety of psychological factors.

What is Prospect Theory? It assumes that the risk decision-making process is divided into two processes: and evaluation.

Stage individuals collect and process information by means of frame reference points; In the evaluation stage, the value function and the subjective probability weight function are relied on to judge the information. Prospect theory points out that in the face of risk and return, "people's hearts are biased", when it comes to gains, we are risk averse, but when it comes to losses, we are risk lovers.

Five principles: 1) Determine the effect. When it comes to choosing between a definite benefit and a gamble, most people choose a definite benefit. When most people are in a state of profit, they tend to be cautious, risk-averse, and like to take what they see, for fear of losing their profits.

2) Reflection effect. When a person is faced with a choice between losing both, it stirs up his adventurous spirit. Make a choice between identifying the disadvantages and gambling on them, and most people will choose to gamble on them.

In reality, when most people are in a state of loss, they will be extremely unwilling and would rather take greater risks to gamble, that is to say, when they are in the expectation of loss, most people will become willing to take risks.

3) Loss avoidance.

4) Obsessed with small probability events.

5) Reference dependency. Under the same strip of dismantling, people always like to freeze the criteria of gain and loss, success and failure under the comparison of other references, so as to make different psychological and behavioral reactions. When making decisions, people do not calculate the true value of an item, but judge it with a reference object that is easier to evaluate.

<>< 5 types of thinking models.

Master these 5 thinking models to make your career and wealth abundant.

<>< 5 types of thinking models.

1. Energy thinking.

The ways to use good energy thinking and do a good job of energy input are:1Establish good eating habits:

Know what foods are better for you and reduce the occurrence of inflammation. 2.Establish good sleep habits:

Develop a good biological clock, avoid nervous excitement half an hour before going to bed, and make a silky transition to sleep, 2. Cognitive thinking.

The core logic of cognitive thinking is to understand the process by which a signal is received. In addition, you should consciously construct your own underlying thinking.

3. Input thinking.

4. Cross-border thinking.

Using cross-border thinking, the more solid the foundation of our thinking layer and personal growth layer, the easier it is to cross borders.

Using master thinking, choosing the best within the scope of ability will bring us the highest output.