Which of the Following Games Might a Risk-Averse Person Play

question 104

Multiple Choice

Which of the following games might a risk-averse person play?

• A)a game where she has a 50 percent chance of winning $1 and a 50 percent chance of losing $1
• B)a game where she has a 50 percent chance of winning $100 and a 50 percent chance of losing $100
• C)a game where she has a 60 percent chance of winning $1 and a 40 percent chance of losing $1
• D)a game where she has a 40 percent chance of winning $1 and a 60 percent chance of losing $1

---

Definitions:

Non-Zero-Sum

In game theory, scenarios in which the total win or loss of all participants combined is not equal to zero, meaning one party's gain is not necessarily another's loss.

Distributive Situation

A scenario in negotiation or conflict resolution where parties vie for the division of limited resources.

Zero-Sum Situation

A scenario in negotiations or competitions where one party’s gain is exactly balanced by another party’s loss.

Positive Correlation

A relationship between two variables where they move in the same direction.