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Consider the following gaming scenario. You paid $10 to play the game. In the game, you must choose between two options: A) 89% chance
Consider the following gaming scenario. You paid $10 to play the game. In the game, you must choose between two options: A) 89% chance of getting $900; 10% chance of losing $200; 1% chance of not getting anything B) 90% chance of getting $600; 10% chance of getting $1,400 What option should be taken? From a point of view of: 1) Normal utility theory assuming you are risk neutral 2) Using Prospect Theory Use an alpha of 0.88 and a Kappa of 2.25
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