Adam Alter explains why only 1 in 20 people would take him up on the offer:
Until recently, it was difficult to measure how painfully losses stung and for how long, but a recent paper suggests that the gamblers and teachers were wise to be cautious. Five European economists and psychologists measured how 50,000 German and British workers responded when their incomes rose and fell between 1998 and 2009. At the end of each year, the German respondents indicated how happy they were on a scale that ranged from “totally unhappy” to “totally happy.” The British sample completed the General Health Survey, which measured the presence of 12 signs of psychological distress.
Both groups were sensitive to changes in their income, but a loss of $1,000 was more than twice as damaging as a gain of $1,000 was helpful. I mentioned earlier that the people I surveyed were unwilling to play a fair gamble unless the prize for winning was two-and-a-half times greater than the punishment for losing – and that pattern resonates with the outcomes of the European study. The researchers were careful to consider a long list of factors that may have magnified the impact of losses, including the possibility that people who earned less had lost their jobs or marriages, or were caring for more dependents than were the people whose income had risen. The pattern held even when those factors were ruled out.
These results suggest that our collective fear of losses is grounded in wisdom: losing money really hurts us more than winning money helps.
The Dish 