Recently, I was driving back home with my family. As we approached a dangerous intersection (i.e., where one cannot see the cars that cross the intersection perpendicularly to one's vantage point), I asked my wife the following macabre question: How much money would she have to be paid (if any) to be willing to burn the upcoming red light? I suppose that this is a variant of the old "I dare you" game albeit with extraordinarily serious consequences.
Earlier this morning, I caught part of the 2007 movie titled Live! starring Eva Mendes wherein she plays the role of a television executive who creates a game show in line with my hypothetical question. Specifically, six contestants partake in a game of Russian roulette (one live bullet and five harmless ones). They are randomly picked to pull the trigger while pointing the gun to their temple. If they draw a blank (literally), they are awarded $5,000,000. Whereas such a game could not exist in the real world it does raise a fascinating question: How do individuals determine the risk that they would be willing to bear in order to obtain a large sum of money? Would you be willing to be a contestant on the latter game show? If not, what would the odds of death have to be, prior to your accepting to play the game for $5,000,000?
This reminds me of the 1993 movie Indecent Proposal starring Robert Redford, Woody Harrelson, and Demi Moore. Redford's character, a rich industrialist, offers the young married couple (played by Harrelson and Moore) $1,000,000 to spend the night with the wife (incidentally I discuss this movie in both my 2007 and 2011 books when highlighting the Darwinian roots of gripping movie themes). Of course, the tension in such a scenario lies in the fact that it is particularly difficult for men to accept such a bet (i.e., more so than it might otherwise be for wives to do so).
This discussion might strike you as an esoteric and hypothetical academic exercise. However, humans (especially males) engage in many death-defying activities for large monetary payoffs. Men constitute more than 90% of the victims of work-related deaths in any given year albeit it is clear that the work-related risks of even the most dangerous jobs are much lesser than the one in six odds of dying in the traditional game of Russian roulette.
Let us contextualize the risks inherent to everyday actions: In a 2006 article published at reason.com, Ronald Bailey provides the following lifetime probabilities of dying: car accident (1 in 83), strolling down the street (1 in 625), and plane crash (1 in 5,000). Again, these constitute lifetime probabilities and not the probability of dying on any given occasion. Nonetheless, they provide you with a sense of how likely one is to die when engaged in typical daily activities.
Returning to my bet, how much money would you have to be offered to accept a bet that had a 1% chance of death? What about a 50% chance of death? I find these scenarios particularly interesting because they use a tradeoff that is extraordinarily more consequential than that typically assumed by behavioral decision theorists. Incidentally, there are some similarities between the scenarios that I am proposing here and valuation of life models in economics.
Again, I fully realize that these scenarios are grossly esoteric and unrealistic. However, I can't help but think that exploring how one might make a decision when facing such tradeoffs is a fun intellectual exercise. I look forward to your thoughts.
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