(13) Consider a person with the following value function under prospect theory: when z 20 v(2) - -2(-2)5 when z<0 Assume that this individual weights values by probabilities, instead of using a prospect theory weighting function. Which of the following prospects would be preferred? (A) P1(.8, 1000, -800) (B) P2(.7, 1200, -600) (C) P3(.5, 2000, -1000) (D) P4(.4, 2000, -1000) Liannn lne to

(13) Consider a person with the following value function under prospect theory: when z 20 v(2) - -2(-2)5 when z<0 Assume that this individual weights values by probabilities, instead of using a prospect theory weighting function. Which of the following prospects would be preferred? (A) P1(.8, 1000, -800) (B) P2(.7, 1200, -600) (C) P3(.5, 2000, -1000) (D) P4(.4, 2000, -1000) Liannn lne to

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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