Respuesta :
Answer:
Following are the description to this question:
Explanation:
In the give question, some information is missing so, the missing information and its solution can be defined as follows:
Following are the Missing information:
"Expected value theory predicts that most people:"
"Prospect theory predicts that people:"
Solution:
Accepting the gamble:
The complete actual cost to this game is (0.5 \times $11) + (0.5 \times -$9) = + $1, as per value function concept. If the majority of the population firstly function completely in a rational way, many other people need to accept the gamble.
Rejecting the gamble:
Analysis has also shown that risks of losing are 1.5 to 2 times very negative with most people than that of the odds of even an equal benefit were positive. Thus, its theory for prospective potential predicts that almost all people would quantify and not embrace the net psychological effect of its game.
