I have been writing for a few days about risk-seeking and risk-averse behavior. In particular, I described the famous Asian Flu problem. For those who haven't read about it yet or don't remember it, here it is again:

Version 1
A new strain of flu is expected to kill 600 people. Two programs to combat the disease have been proposed. If program A is adopted, 200 people will be saved. If program B is adopted, there is a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved. Which of the two programs would you favor?

Version 2
A new strain of flu is expected to kill 600 people. Two programs to combat the disease have been proposed. 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 of the two programs would you favor?

The important result is that even though the two questions are exactly the same, when given Version 1, people prefer program A. When given Version 2, people prefer program B.

At least, that is the story usually given. Steven Pinker has made a very convincing argument that the two versions are not the same:

The description "200 people will be saved" refers to those who survive because of the causal effects of the treatment. it is consistent with the possibility that additional people will survive for different and unforeseen reasons--perhaps the flu may be less virulent than predicted, perhaps doctors will think up alternative remedies, and so on. So it implies that at least 200 people will survive. The scenario "400 people will die," on the other hand, lumps together all the deaths regardless of their cause. it implies that no more than 200 people will survive. (Stuff of Thought, p. 260)

It is difficult to tell from the text whether Pinker is suggesting an explanation for why people are risk-averse for gains but risk-seeking for losses, or whether he is just noting a contributor factor to this particular experiment. Risk-aversion has been so well studied over the last several decades I seriously doubt that every demonstration is susceptible to this criticism.

The reason that I think this is a really important point is that it illustrates how the strict logical meaning of a sentence is not always what the sentence "means." That is, we often read between the lines without even noticing it. Here, these two versions of the Asian Flu problem, strictly speaking and according to logic, are identical. That doesn't mean that they are necessarily interpreted identically.

Tversky, A., Kahneman, D. (1981). The framing of decisions and the psychology of choice. Science, 211, 453-458.