http://willwilkinson.disqus.com/The Sweet Release of ReasonenThu, 26 Oct 2006 19:10:06 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710785<p>If somebody will show me where I can find a 50/50 shot at risking half my income for the chance to double it, I may consider the risk.<br>Odds worse than that and I think you can substitute "prudent" for "risk aversion". It seems that Americans are risking a lot more than people give them credit for. I don't know how we can have record debt, extremely low savings AND the insatiable desire for non-essential goods without betting that our futures will be at least as good if not better. Unless we're just stupid.</p>mikeThu, 26 Oct 2006 19:10:06 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710778<p>I think loss aversion is pretty easily explained by a diminishing marginal utility of wealth.</p>TimothyThu, 26 Oct 2006 12:44:22 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710784<p>"How much of your income would you be willing to put at risk to get a chance at twice your current income? If you’re like most Americans, the answer is “not much”—and for a simple reason: While you’d love to have more money, your life would be thrown into turmoil if your income dropped by, say, half."</p><p>Loss aversion is a real phenomenon, but it irritates me when people use it willy-nilly. The attitude described in the passage above doesn't require anything more than plain old risk aversion (though loss aversion *could* also be involved).</p>GlenThu, 26 Oct 2006 03:08:29 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710782<p>Hehe,</p><p>I assume nobody at Cato has parents in a nursing home or children in daycare or a medical condition not covered by insurance?</p><p>A drop in income for you guys will simply necessitate you construct a less pretentious persona...</p>monkyboyWed, 25 Oct 2006 17:20:32 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710781<p>Cold.</p>Will WilkinsonWed, 25 Oct 2006 14:59:09 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710780<p>I'll definitely document the changes in my happiness levels if you get run over by a cement truck.</p>nobodyWed, 25 Oct 2006 14:53:56 -0000http://www.willwilkinson.net/flybottle/2006/10/25/illusions-of-risk/#comment-3710779<p>I wonder how many Catoites will get to test your theories if the Democrats return to power?</p><p>Don't forget to document your happiness levels as you search for another job guys!</p>monkyboyWed, 25 Oct 2006 01:16:21 -0000