Asian disease

The "Asian Disease" problem is one of Amos Tversky and Daniel Kahneman earliest laboratory experiments, which demonstrates framing effects in economics and was key to their development of prospect theory, a realistic alternative to John von Neumann's expected utility.

Subjects were given one of two problems (Problem 1 or 2) and in each case asked to choose between Program A or Program B.

Problem 1: Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. There are two alternative programs. If Program A is adopted, 200 people will be saved. If Program B is adopted, there is a one-third probability that all 600 people will be saved and a two-thirds probability that no people will be saved.

Which do you prefer, Program A or Program B?

Problem 2: Imagine that the U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. There are two alternative programs. If Program A is adopted, 400 people will die. If Program B is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die.

Which do you prefer, Program A or Program B?

This is known as a framing issue. It's easy to see that both problems are identical in terms of real results, but when it was framed as Problem 1, 72% preferred Program A, while when it was framed as Problem 2 only 22% preferred Program A.

ources

* Tversky, Amos, and Daniel Kahneman, 1981. "The Framing of Decisions and the Psychology of Choice." Science 211: 453-458.