Consider the Following Scenario When Answering the Following Questions

question 25

Multiple Choice

Consider the following scenario when answering the following questions:
Suppose that,in an experimental setting,100 students are asked to choose between Gamble A and Gamble B,where:
Gamble A: The student will receive $5 million with a 100 percent probability.
Gamble B: The student will receive $5 million with a 51 percent probability,$10 million with a 25 percent probability,and $0 million (nothing) with a 24 percent probability.
-A risk-neutral student is

• A) likely to choose Gamble A because it has a higher expected value.
• B) likely to choose Gamble B because it has a higher expected value.
• C) likely to choose Gamble A because the student will win something (as opposed to nothing)with a higher probability.
• D) likely to choose Gamble B because the student will win something (as opposed to nothing)with a higher probability.
• E) indifferent toward Gambles A and B because they have the same expected value.

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Definitions:

Relationship outcomes

the possible results or endings of interactions between two or more parties.

Accommodation

A strategy in conflict resolution where one party yields to the wishes or demands of another to maintain harmony and avoid conflict.

Procedural issues

Concerns or matters regarding the methods, processes, or steps followed in carrying out actions or resolving conflicts.

Negotiator's goals

The objectives or outcomes a negotiator aims to achieve in a negotiation process.