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Choice experiments show us that, on average, people exhibit risk attitudes different from what the standard economic model predicts. Which of these statements is FALSE?
Choice experiments show us that, on average, people exhibit risk attitudes different from what the standard economic model predicts. Which of these statements is FALSE?
A. People who experience a windfall gain are likely to stop being risk averse.
B.
Unrealized losses induce people to be highly risk averse.
C.
When faced with big loss in wealth compared to a reference point, people will take extraordinary risks on a chance to get back to zero.
D.
A pattern of remarkable successes leads people to believe success is highly likely, even certain.
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