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Problem 1 (Diminishing Seusity of Prospect Theory Value Function): Kahnenian and Tversky provided one group of experimental participants with the scenario in which they had

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Problem 1 (Diminishing Seusity of Prospect Theory Value Function): Kahnenian and Tversky provided one group of experimental participants with the scenario in which they had recently gained $2000. They then were asked to state their preference for Lottery A [a 50% chance of losing $1000 and a 50% chance of losing $0] or Lottery B (a loss of $500 with certainty). A different group of participants was given a scenario in which they had recently gained $1000. They then were asked to state their preference for Lottery C [a 50% chance of gaining $1000 and a 50% chance of gaining $0) or Lottery D (a gain of $500 with certainty). A} Explain why under expected utility theory, these two decisions are considered to be equivalent

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