Predictably Human UPDATE

The Predictably Human Survey was created to help expose some of the behavioural effects which affect our decision making. These effects are sometimes referred to as “cognitive biases” because they lead to decisions which are sub-optimal when considered in purely economic terms, and used as evidence that people behave irrationally.
The first survey question illustrates this point, respondents are asked if they would take a bet where, on the toss of a coin they could win £15 if they got heads, or loss £10 if they got tails. If people behaved perfectly rationally and wanted to maximise their income they would take the bet every time, since where you have an equal chance of winning £15 or losing £10 the expected value is +£2.50. However, because people are human, in the latest wave of the survey 54% took the bet. In other waves of the same survey it’s been as low as 21%, illustrating the important point that people vary and, more particularly, their circumstances vary. The reason is humans are affected by Loss Aversion which means we put greater value on losses than on gains.
The different treatment of losses and gains is explored further in the following questions:
Which would you choose?

• Winning a certain £500 or 50% chance of winning £1,000
• A certain loss of £500 or 50% chance of losing £1,000

If humans were entirely rational, the responses to these two questions would be the same, but as shown in the charts below they are very different.
 
Different treatment of losses v gains 
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​The Predictably Human survey (the full survey explores other biases such as short-termism, and relativity) demonstrates that people don’t make entirely rational choices, but that they are still reasonably predictable if you take into account the behavioural effects at work.