Machiavelli & Prospect Theory

Machiavelli 

There is this quote in his book (The Prince) , which influenced me a lot. 

"The only way to appear generous is to be mean. Then your occasional acts of generosity will be remembered. If you try to be generous all the time, people will remember only your occasional acts of meanness." 

I believe in this ( which also states that I am highly likely to be biased in favor of his views too ). 

Prospect theory 

This theory was authored by Daniel Kahneman & Amos Tversky. 

I'll take two concepts from this theory, which are Possibility effect & Certainty effect. Consider the following gamble: (directly take from the book)

In the four examples below, your chances of receiving $1 million improve by 5%.  Is  the  news equally   good  in  each case?

A.   From  0  t o  5%

B.   From  5%  t o  10%

C.   From  60%  t o  65%

D.   From  95%  t o  100%

In each case, the prediction increases with the same 5%. That means the expected value of the utility has to be the same. But almost everyone agree that Case A ( from 0% to 5%) & Case D ( 95% to 100%) are more impressive. 

The large impact of 0% --> 5% illustrates possibility effect, and the other illustrates certainty effect.

This means that we give more weight to low probability events, such as this ONLY 5%. 

For example ( In perspective of boys) : Lets see this as a gamble and nothing more, a boy approaches the girl whom he's interested in,

and consider these two independent scenarios. 

Case A : The girl rejects him then and there itself. (Check-mate)

Case B : The girl (out of her empathy) responds smilingly though not promisingly. 

Case A suggests the probability of 0% likely, and Case B suggests the less probability ( say 5%). The mere transition from nil to small probability causes possibility effect, which in turn makes the boy filled with LARGE HOPE. 

Conclusion of possibility effect : We misjudge the events of less probability which are likely to yield a large outcome ( in the above example, girl loving back).

Machiavelli & Prospect theory

You've seen the negative part of possibility effect. Now consider the following which is somewhat positive.

Read that quote again. And I am sure that some of you guys might have thought that quote is bad or dictating evil. I entirely disbelieve such opinion. 

And I think Prospect theory provides psychological proof for that quote. Consider a following example: You have a complex question and you are looking for an answer, and you know that  only two persons can answer that. Mr. X and Miss. Y. 

Mr. X is consistent wit you, generous with you all the time and less likely that he can solve the problem.

Miss Y on the other hand is not generous with you all the time, but when needed she solved your problem in the past and provided good advice. This states very high outcome with very less probability. 

With the possibility effect, you tend to approach Miss Y. (Who is of directly opposite of nature what you believe in - generous all the time)

Example breakdown :

What happens exactly? 

When you face this choice that whom to approach, your mind starts recollecting the past history and data. In the case of Miss. Y, the rare events such as written above helping or solving the problem in the past with using her intellect and advice comes to mind very quickly if that event is vivid enough. This makes you assigning more weight in the choice to approach Miss. Y. 

This is what Machiavelli conveyed for future leaders: Be generous only few times but you should do those generous acts in such a way that people will have a vivid memory. 

P S : If those events are not vivid enough to be recalled , then you may favor Mr. X because of constant impressions he created. 

P P S : The writing style was predominantly made this way to create vividness. (And it is inspired from my professor) 

Thanks for reading.