Show That This Decision Maker Is Indifferent Between Gaining Nothing

question 50

Essay

Show that this decision maker is indifferent between gaining nothing and entering a risky situation with a gain of $80,000 (probability 1/3)and a loss of $10,000 (probability 2/3).

---

Definitions:

Ethical

Pertaining to or dealing with morals or the principles of morality; pertaining to right and wrong in conduct.

Sigmund Freud

This Austrian neuroscience expert laid the groundwork for psychoanalysis, a therapeutic method that involves dialogic treatment between a patient and a psychoanalyst to cure mental pathologies.

Psychology

The systematic exploration of behavior and mental processes, covering different elements of both conscious and unconscious experiences along with cognition.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment.