Sunday, February 22, 2009

Unwilling to part with $1000 but happy to part with $10000

Is it possible that a person is happy to part with $10000 but unwilling to part with $1000? Let say someone approach Mr. X to donate $1000 for some charity. Mr. X felt that this is too much money to waste and he said no. Mr. X also invest $100000 in some financial instrument, something like Lehman Mini-bonds. Then he was told that he would lose all his money. After many years, he was finally told that he can get back 90% of his investment, losing only $10000. He was overjoyed that he only lose $10000. So it is always possible for a person to be happy when losing a big sum of money in hope of making more money, but unwilling to give small sum of money for charity.

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