An Individual Is Uncertain Whether to Bet on a Football

question 21

Multiple Choice

An individual is uncertain whether to bet on a football game. He believes that the probability of his team winning is 40%. If his team wins, he will receive $180. If his team loses, he'll pay $120. If the decision is based on the expected value criterion, then the individual will:

• A) not take the bet if he is risk loving.
• B) be indifferent to the bet if he is risk-neutral.
• C) take the bet only if he is risk averse.
• D) not take the bet if he is risk averse.
• E) Answers b and d are both correct.

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Definitions:

False Belief Task

A cognitive experiment used to assess an individual’s ability to understand that others can hold beliefs that are different from the individual's own and may not reflect reality.

Developmental Psychologists

Professionals who study the growth and development of the human mind and behavior across the lifespan.

Theory of Mind

Theory of Mind is the ability to attribute thoughts, desires, and intentions to oneself and others, understanding that others have beliefs and perspectives different from one's own.

Subconscious Awareness

The part of the mind that is not currently in focal awareness yet influences thoughts, feelings, and actions.