December 13, 2017, by apydb1

Is it Rational to go Skydiving?

1. How we would Normally Decide

The ordinary way of discovering the most rational action is calculating the expected value of each outcome.

The value of each outcome takes into account:

1. The value of each particular outcome
2. The probability of each outcome occurring

In terms of skydiving, we would assess the value of going skydiving, and the value of not going skydiving, followed by the probability of each of these values occurring.

2. But is it that easy?

BUT some decisions involve Transformative Experiences!

Transformative Experiences – The experience of something new which changes the life of a person in an important way.

If someone has not experienced the outcomes of a particular decision, then they can’t know how they feel about the outcomes of this action.

“Because you cannot know the value of the relevant outcome, there is no rationally acceptable value you can assign to it.” – Laurie Paul

http://yourfinancebook.com/change-llp-name-limited-liability-partnership/

 

 

 

 

 

 

 

 

3. Types of Decisions we can make

 

A Rational Decision

• A decision which does not involve a Transformative experience.
• Selects the action which i­s believed to produce the most valued outcome.
• If you have been skydiving before and it had a positive effect, then deciding to go skydiving is a rational decision.

An Irrational Decision

• A decision which does not involve a Transformative experience.
• Selects the action which is not believed to produce the most valued outcome.
• If you have been skydiving before and it had a negative effect, then deciding to go skydiving is an irrational decision.

A Non-Rational Decision

• A decision which involves a transformative experience.
• Does not allow one to make a judgement on the possible outcomes of the action taken.
• If you had not been skydiving before, then you would not be able to make a rational or irrational decision to go skydiving.

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