The fact of the matter is that humans just aren’t cut out for rational decision making. We’ve spent centuries training ourselves to be otherwise and will always aspire to be less heuristically-driven, but…
We examine the risky choices of contestants in the popular TV game show “Deal or No Deal” and related classroom experiments. Contrary to the traditional view of expected utility theory, the choices can be explained in large part by previous outcomes experienced during the game.
More here (hat tip to loyal reader Brucey)
The key part is that last line: “contrary to expected utility theory”. This is code for: “people do stuff that looks completely stupid to Monday-morning Quarterbacks.”