Would you pay with your life? (Hint: Yes, yes you would!)


Literature indicates that when a person is not absolutely sure about the value of an object his/her the amount they are willing to pay for that object goes down. This is not strange as the expected value of the object has gone down. All existing literature has, to my knowledge, dealt mostly with willingness to pay in the most economic sense of the word. In most cases costs consisted of the price of the object as well as the required transportation costs. Today I would like to investigate how things change when we look at one of the most extreme form of payment: paying with your own life.chances of death

There is a multitude of cases to be thought of where one has to make a trade-off between ones’ guaranteed continuation of existence and some concrete/abstract good. People sign up for the army, essentially risking having to pay with their life for some type of higher goal. People with a fatal food allergy risk paying with their life every time they eat a product without checking the ingredients thoroughly. In traffic we sometimes risk our lives simply to arrive somewhere on time.

Curiously, uncertainty discounting works on both sides of the equation in these examples. In the army example it is almost impossible to ascertain if the ‘greater good’ is objectively part of a better moral framework than the overarching goal of the soldiers on the opposing side.
It is also very hard to assess whether food is going to be ‘to die for’ when one is risking an allergic reaction.
Yet, the price we might pay, namely death, is never certain either. We are unsure if we will actually die, and we are definitely not capable of imaging what death would look like. So, how do we make these trade-offs? If we add death to the mix, are we more or less likely to take uncertain positive outcomes into account?

It is my belief that in these situations, where the price is potentially extremely high, the possible outcome must also be extremely high. I imagine such a decision to look somewhat like this:

(% chance of death * personal belief about the cost of death)+other costs of transaction = % chance of valued outcome * personal belief about the value of that outcome

This formula means the following: If I am a veryRisk of avoiding all risks religious person who believes she/he will go to heaven after death, the costs of dying nears on 0. This explains for example why some religious extremists are willing to blow themselves up for a cause.  Their calculus might look something like this:

(98% chance of death * 0 costs of dying) + some money for bomb creation = 48% chance of achieving desired goal * Extremely high value of achieving goal.

From this perspective blowing oneself up would be the outcome of the calculus. (Note: I do not condone suicide bombing, I’m merely offering an explanation for it.)

Alternatively, if I believe my chances of dying are extremely small, I might be more willing to take that risk. This explains why bicycle riders in the Netherlands often take dangerous decisions in traffic. They believe that legislation in the Netherlands give automobile drivers an extreme incentive to avoid hitting bicycle drivers and those accidents are therefore unlikely to happen. The low chances of death would therefore not weigh up to the added value of arriving on time.

So, how does the presence or lack of presence of information change ones’ decision?speeding-cartoon1-757218

In the case of the food allergies there is an objective truth, yet the information might not always be available. In for instance at a catered event, finding out what is in the food is near impossible. The cook might very well not be there, the catering staff does not have the information and are too short on time to check. Yet, a short chat with the staff might calm the nerves about the food. The allergic person would have already ascertained themselves that the allergen is unlikely to be present in them. The staff, having no absolute information, but capable of giving an expert view point might have agreed. In possession of the internet, the allergist might have researched whether their allergen is suggested in any recipe for this dish. After all this research, uncertainty persists.
In the literature, buyers of photo cameras suffered less from uncertainty discounting when they read user reviews or saw others had bought this product too. (Chen, Y., Wang, Q., and Xie, J. 2011. Online Social Interactions: A Natural Experiment on Word of Mouth versus Observational Learning.) This was not information pertaining from the object itself, yet uncertainty was decreased.
The same effect occurs with the allergy patient, especially if at the same time a growing hunger increases the value of food.

Believe me; I have the hospital visits to prove it.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: