In addition to whatever you own, you have been given $2000. You are now asked to choose between: 1. A 50% chance of losi

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In addition to whatever you own, you have been given $2000. You are now asked to choose between: 1. A 50% chance of losi

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In Addition To Whatever You Own You Have Been Given 2000 You Are Now Asked To Choose Between 1 A 50 Chance Of Losi 1
In Addition To Whatever You Own You Have Been Given 2000 You Are Now Asked To Choose Between 1 A 50 Chance Of Losi 1 (125.13 KiB) Viewed 326 times
In addition to whatever you own, you have been given $2000. You are now asked to choose between: 1. A 50% chance of losing $1000 2. A sure loss of $500 a. Use Google Sheets to compute the expected value of Lottery 1? (Don't forget to include the initial $2000 - so the outcomes for lottery 1 are either $1000 or $2000) b. Use Google Sheets to compute the expected value of Lottery 2? c. Does Expected Value Theory have a preference between the two lotteries? d. Is that preference risk averse, risk seeking or risk neutral? e. Do you notice any similarity between this survey question and the previous one?
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