How Changing Predictions Affect Our Decision-Making

Pacific Standard:

If you heard on the radio this morning that there was a 30 percent chance of rain, would you pack an umbrella? Now, what if that estimate represents a revision over the previous night’s forecast—down from 40 percent, say, or up from 20 percent? According to a new study, revisions like that affect how we subjectively perceive probabilities—and maybe how we make decisions about everything from umbrellas to climate change.

…

But that is not how we human beings think about probability. In reality, psychologists Sam Maglio and Evan Polman point out, we experience probabilities more as a kind of psychological distance: The higher the probability of an event, the nearer and more important the event seems.

Read the whole story: Pacific Standard