Reading Comprehension

PT113 · S1 · P4 · Q23 Risk

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Recent investigations into the psychology of decision making have sparked interest among scholars seeking to understand why governments sometimes take gambles that appear theoretically unjustifiable on the basis of expected costs and benefits.

Topic

Why governments (and people) sometimes take seemingly irrational risks—especially in situations involving potential losses.

Framework

Answer / Explain

Main Point

New research in decision psychology shows that people and governments are much more willing to take big risks when they’re facing a loss, compared to when they’re just aiming for a gain—even if the "rational" cost/benefit doesn’t make sense. The author illustrates this with examples from both experimental psychology and international conflict. The Most Valuable Sentence appears at the end of the first paragraph:

P1: Introduction to Risky Decision-Making

This paragraph sets up the central puzzle: why do people (including governments) sometimes make risky decisions that don’t make sense according to the “objective” costs and benefits? It introduces the idea that potential losses drive risk-taking more than potential gains.

P2: Challenging Old Ideas About Rationality

Here, the author explains how economists used to believe that people avoid risks unless the reward is obviously big enough. But psychological research reveals that people dislike losses much more than they enjoy equivalent wins, meaning most people would only take a risky $100 bet if the possible reward was much higher than $100. However, people become more willing to gamble when faced with a sure loss, sometimes preferring even a small chance to avoid losing altogether.

P3: Applying Decision Psychology to International Conflict

The paragraph connects the ideas to real-world events, especially international conflicts. Governments will usually avoid risky actions, but when they feel something has been unjustly taken from them, they’ll risk a lot to get it back—even if, objectively, it’s not worth it. The Falkland Islands war is used as an example, showing both sides taking big risks to regain something they believed was rightfully theirs. The key takeaway is that understanding each actor’s point of view is crucial in international affairs.

23.

The question in the second sentence of the second paragraph functions primarily as

the introduction to a thought
Contradicted: will vary widely
This thought experiment is supposed to have a very predictable outcome (not widely different responses). The author is discussing this experiment because it demonstrates a common feature of our psychology. People tend to judge this thought experiment in similar ways. "It is commonplace to think ____ . Accordingly, such a gamble would typically be accepted only when ___ . Research subjects do, in fact, commonly judge ___. "
3% picked this
a rhetorical question whose assumed
Opposite: in conflict with
This rhetorical question gets answered in an experiment, and the results of this experiment are supposed to illustrate the previously accepted view of risk-taking. In this experiment, people aren't willing to take risks on a 50/50 gamble unless the expected winnings are way more than the expected losses. The previously accepted view gets turned on its head in the final paragraph. For some reason, countries are sometimes willing to take risks even though the expected winnings are not way more than the expected losses (and the passage identifies that the reason for this exception is that people hate to lose something they subjectively consider theirs).
21% picked this
Correct
the basis for an illustration
Why this is right
Like the vast majority of correct answers on question asking about the function / purpose of a detail, this correct answer sounds like the setup text that occurs right before the detail being asked about. As we've discussed, this rhetorical question and the attached experimental data are meant to illustrate the previously accepted notion of risk-assessment. In this experiment, people are not willing to gamble on a 50/50 proposition unless the expected winnings are "sufficiently high" to compensate for risk. Sure enough, people aren't willing to risk $100 unless they stand to gain at least $300.
Skill tested: Local Purpose · how this choice captures the passage's function is the move to repeat next time.
70% picked this
a suggestion that the discrepancies
Wrong Purpose
At no point in this paragraph (or the passage) is the author trying to say there's no real difference between a subjective and an objective valuation of possible decision outcomes.
2% picked this
a transitional device to smooth
Out of Scope: unaccepted findings
This is sort of a funny answer, because it isn't describing the logical purpose of a sentence (i.e. how it relates to the nearby discussion). Instead, it's describing the stylistic purpose (i.e. how it affects the reader's flow). It seems very unlikely that we'd ever see a correct answer describing the function of a sentence by talking about as though we're the author's editor and giving feedback on how they could improve readability. Furthermore, there is nothing in the passage about "previously unaccepted research findings". There is a previously accepted notion of risk and a now-updated notion of risk. But there aren't research findings that haven't been accepted.
4% picked this

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