Decision Model

For example, it was proven axiomatically, that if a person rejects the following bet: 50% probability to win $105 and 50% probability to lose $100, such a person should also reject (on the standard principle of the convexity of utility function) a 50-50 bet of losing $4,000 and winning $400,000 :roll:
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Do you mean that they will or they should?
Click to expand...


They should if they make consistent choices on the basis of standard principles of utility theory. In practice, they won't, of course :lol:
 

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