Afraid of loosing...

To understand the design, sometime we have to go back to some human fundamentals...

I just learn an interesting view on human perspective on loss aversion which I hope to record here. 
Based on given amount and head or tail challenge.


Case 1:
Given $1000

Take a risk:  [ Head get $1000 more, Tail loose and get $0]
Play it safe : [ Get $500 more no matter what ]


Case 2:
Given $2000

Take a risk:  [ Head loose $0 , Tail loose $1000]
Play it safe : [ Loose $500 no matter what ]


It was understood even in human and some primates study, both will more preferably choose to play it safe in case 1, but when the scenario is changed in case 2, more will take the risk option. The interesting point to observe here is that in both cases, playing it safe will make one person still have $1500. However, the relative view of human mind chooses bases on the perception where it is called risk loss aversion

Interestingly, that how our finance/economy is geared up to capitalize on this psychological aspect of human  behaviors.