Imagine that you are in charge of health policy in your country. A mutation of the swine

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Imagine that you are in charge of health policy in your country. A mutation of the swine flu virus leads to a rapid increase in the number of people contracting the virus, with the expectation that 1,200 people will die as a result. There are medications and inoculation programmes that will help save some lives, but it is inevitable that some people will die.

Your problem is presenting the news to the population. Your officials present you with the following four wordings as part of your speech on the policy:

a. Our inoculation programme will save the lives of 400 people.

b. We are going to offer a programme to all the population that will have a one-third chance that 1,200 people will live.

c. Unfortunately, despite the best efforts of this government, our inoculation programme will not be enough to save everyone and so I must tell you that even with the programme, 400 people will die.

d. Our inoculation programme will help, but I must be honest with you and tell you that the programme has a one-third chance that no one will die but a two-thirds chance that 1,200 people will die.

Which option would you choose? Does it matter which one you chose? Why? Why not? How does this highlight prospect theory and the idea of framing?

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Economics

ISBN: 9781473768543

5th Edition

Authors: Gregory Mankiw, Mark P. Taylor

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