suppose that, in an experimental setting, 100 participants are asked to choose between Gambles A and B, where: Gamble A:
Posted: Thu May 19, 2022 8:09 am
suppose that, in an experimental setting, 100
participants are asked to choose between Gambles A and B,
where:
Gamble A: The participant will receive $5 million with a
100% probability
Gamble B: The participant will receive $5 million with a
50% probability, $10 million with a 25% probability, and $0 million
(nothing) with a 25% probability.
A risk-neutral participant is
participants are asked to choose between Gambles A and B,
where:
Gamble A: The participant will receive $5 million with a
100% probability
Gamble B: The participant will receive $5 million with a
50% probability, $10 million with a 25% probability, and $0 million
(nothing) with a 25% probability.
A risk-neutral participant is