From the course: Dan Ariely on Making Decisions

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How do I make a decision when the stakes are high?

How do I make a decision when the stakes are high?

From the course: Dan Ariely on Making Decisions

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How do I make a decision when the stakes are high?

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- Today I want to try and attack the question of how do I decide when the stakes are high? Of course, it's a tough, big question. But here're a few things to consider. First of all, when the stakes are high, it also means that emotions are high. It also means that more people would look at the decision. It also means that we would look more carefully at what we get to loose. What is the downside? In every decision, there's an upside and there's a downside. And one of the dangers is that as decisions get bigger and bigger, we pay more and more attention to the downsides. So for example, if I say I'll give you a coin flip. If it falls on head, you'll make $12, if it falls on tail, you will lose 10. Plus 12, minus 10. What if I make that decision really big? Heads or tail. If it falls on heads, you'll make $12,000. If it falls on head, you lose $10,000. What if we make it even bigger? $120,000 minus $100,000. What…

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