Alexis Is Participating in a Perception Experiment Where She Will

question 501

Multiple Choice

Alexis is participating in a perception experiment where she will be paid $10 for every letter she sees flashed briefly on a computer screen. If Alexis says there is a letter but there is not, she is not penalized - she just does not receive $10 for those responses. Given this situation, Alexis will do well financially to use a ______ decision criterion.

• A)bold; this will prevent making false alarms
• B)bold; she'll commit more false alarms but also increase her "hits"
• C)conservative; she'll commit more false alarms but also increase her "hits"
• D)conservative; this will prevent making false alarms

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Definitions:

Central Limit Theorem

A statistical theory that states that, given a sufficiently large sample size from a population with a finite level of variance, the mean of all samples will be approximately equal to the mean of the population.

Simulation

The use of a computer model to replicate the behavior of complex systems in order to study their properties or predict outcomes under different scenarios.

Risk Analysis

The process of identifying potential risks, quantifying their impact, and developing strategies to manage and mitigate them, especially in business and projects.

Uncertainty

The state of being unsure or having doubts, often quantifiable in finance and science.