Thinking in a different language affects how you make decisions

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The languages you know affect how you think.

Back in 2002, psychologist Daniel Kahneman won the economics Nobel Prize for showing that human beings don’t have a really good intuitive grasp of risk. Basically, the decisions we make when faced with a risky proposition depend more on how the question is framed than on what the actual outcome might be.

The classic example is to tell a subject that there’s going to be a disaster. Out of 600 people, she has a chance of saving 200 if she takes x risk. If she doesn’t take the risk, everybody dies. Most people will take the risk in that scenario, but if you present the same situation and frame it differently—”If you take this risk, 400 people will die”—the decisions suddenly flip in the other direction. Nothing has changed about the outcome. But everything has changed in terms of how people feel about the decision they have to make. This is the kind of thing that matters a lot to economics because it helps to explain why economic behavior in the real world isn’t always as rational and self-interested as it is in theory…

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