Tuesday, October 31, 2006

Uncertainity clouds judgement

I recently posted this on Business Week CBS ED forum:

I can't recollect but I read somewhere recently that uncertainity clouds the judgement. In the book, a study was conducted where people were given the following scenario:

"You have given your final exam. You are not sure how you did and you may either pass or fail. The results will come out tomorrow. However, you get an excellent deal online to holiday in Hawaai but the deal expires today. What will you do?"

Most of the respondents said they won't take the deal.

Now everyone will agree It makes sense. You don't want to splurge when you don't even know whether you will pass.

Now the study conducted the same experiment but this time you knew you had passed. Will you take the deal. Most of the respondents said they will take it to celebrate the ocassion.

This again makes sense. Doesn't it?

Again the same experiment but this time you have failed. Will you take the deal? Most of the respondents said they will take it just to get away from depression and come back recharged.

This response also makes sense.

So, what do we conclude. That the people should take the deal irrespective of whether or not they know whether they will pass or fail. But because of the uncertainity they are not able to make objective decisions. When the outcome is unknown our judgement is clouded.

So, in my situation, rationaly speaking, I should not obsess over the result and should move on. But then I am just as irrational as any other human and until the results are out F5 is my favorite key.