ABSTRACT
Few people would be surprised to learn that, as a rule, we most prefer to focus on the return from a promising deal rather than the risk of possible losses. The thought of making 10%, 50% or more and the consequent pleasure in consuming those winnings implants contented thoughts in our mind. Researchers have been investigating this and many other behavioral biases since the 1950s.1 In 1962, Robert Kates, a geographer working in Chicago, observed that people refuse to buy «ood insurance even when it is heavily subsidized and priced far below fair value.2 This is bizarre behavior indeed and anathema to economics notion of a rational man.
