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If your company makes a particular decision in the face of uncertainty, you estimate that it will either gain $10,000, gain $1,000, of lose $5,000,
If your company makes a particular decision in the face of uncertainty, you estimate that it will either gain $10,000, gain $1,000, of lose $5,000, with probabilities of 0.40, 0.30, and 0.30, respectively. You (correctly) calculate the EMV as $2,800. However, you distrust the use of this EMV for decision-making purposes. After all, you reason that you will never receive $2,800; you will receive $10,000, $1,000, or lose $5,000. Discuss this reasoning.
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