The Monty Hall Problem and why calling someone a bird brain may be a compliment
Getting people to understand this issue has been extremely challenging, it's fun to try to do in person. What I eventually figured out to make it "land" is to have people imagine a monty hall problem with 1000 doors. After they choose, you show them that 998 of the doors do not have the prize. Should they switch? At that point they "get" it because it was 1/1000 when they chose first, now it's 1/2 for the "other" door and still 1/1000 for the "endowment" door they chose ahead of time. I never thought about the endowment effect + loss aversion as the primary driver of not switching doors, totally makes sense!
Great write-up! But one question I thought about while reading it...one of our cognitive biases as humans is to towards action ("action bias"). That we hate the feeling of doing nothing in a lot of situations, even if it's the best choice. It's the old story about why soccer goalies dive in a direction when, statistically, they'd block more shots if they just stayed in the middle. How do you think our loss aversion interact with our bias towards action in a case like this? Shouldn't we want to switch at some level?