Persuaded by DNA Match Statistics?” Law and Human Behavior 25
( 2001 ): 493 – 513.
studies of choice from experience: Ralph Hertwig, Greg Barron, Elke U.
Weber, and Ido Erev, “Decisions from Experience and the Effect of Rare
Events in Risky Choice,” Psychological Science 15 ( 2004 ): 534 – 39.
Ralph Hertwig and Ido Erev, “The Description-Experience Gap in Risky
Choice,” Trends in Cognitive Sciences 13 ( 2009 ): 517 – 23.
not yet settled : Liat Hadar and Craig R. Fox, “Information Asymmetry in
Decision from Description Versus Decision from Experience,” Judgment
and Decision Making 4 ( 2009 ): 317 – 25.
“chances of rare events” : Hertwig and Erev, “The Description-Experience
Gap.”

31 : Risk Policies

inferior option BC : The calculation is straightforward. Each of the two
combinations consists of a sure thing and a gamble. Add the sure thing to
both options of the gamble and you will find AD and BC.
the equivalent of “locking in” : Thomas Langer and Martin Weber, “Myopic
Prospect Theory vs. Myopic Loss Aversion: How General Is the
Phenomenon?” Journal of E {>Joenon?&conomic Behavior &
Organization 56 ( 2005 ): 25 – 38.

32 : Keeping Score

drive into a blizzard : The intuition was confirmed in a field experiment in
which a random selection of students who purchased season tickets to the
university theater received their tickets at a much reduced price. A follow-
up of attendance revealed that students who had paid the full price for their
tickets were more likely to attend, especially during the first half of the
season. Missing a show one has paid for involves the unpleasant
experience of closing an account in the red. Arkes and Blumer, “The
Psychology of Sunk Costs.”
the disposition effect: Hersh Shefrin and Meir Statman, “The Disposition to
Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence,”
Journal of Finance 40 ( 1985 ): 777 – 90. Terrance Odean, “Are Investors
Reluctant to Realize Their Losses?” Journal of Finance 53 ( 1998 ): 1775 –
98.
less susceptible : Ravi Dhar and Ning Zhu, “Up Close and Personal:
Investor Sophistication and the Disposition Effect,” Management Science