I conducted a survey where I asked 8 people both scenarios presented in “Thought

Question

I conducted a survey where I asked 8 people both scenarios presented in “Thought Question 5” shown below. Then,Record the percentage of people who choose alternative A over B and the percentage who choose alternative C over D and answer the questions below.

Thought Question 5 (ask 8 people to answer both questions):

QUESTION 1

If you were faced with the following alternatives, which would you choose, A or B?

A. A gift of $240, guaranteed

B. A 25% chance to win $1000 and a 75% chance of getting nothing

QUESTION 2

If you were faced with the following alternatives, which would you choose, C or D?

C. A sure loss of $740

D. A 75% chance to lose $1000 and a 25% chance to lose nothing

RESPONSES TO QUESTION 1

1. A

2. A

3. A

4. A

5. A

6. B

7. B

8. A

RESPONSES TO QUESTION 2

1. D

2. D

3. D

4. D

5. D

6. D

7. D

8. D

1.1 Report your results for both scenarios. Are they consistent with what other researchers have found?

Explanation / Answer

Answer:

I conducted a survey where I asked 8 people both scenarios presented in “Thought Question 5” shown below. Then,Record the percentage of people who choose alternative A over B and the percentage who choose alternative C over D and answer the questions below.

Thought Question 5 (ask 8 people to answer both questions):

QUESTION 1

If you were faced with the following alternatives, which would you choose, A or B?

A. A gift of $240, guaranteed

B. A 25% chance to win $1000 and a 75% chance of getting nothing

QUESTION 2

If you were faced with the following alternatives, which would you choose, C or D?

C. A sure loss of $740

D. A 75% chance to lose $1000 and a 25% chance to lose nothing

RESPONSES TO QUESTION 1

1. A

2. A

3. A

4. A

5. A

6. B

7. B

8. A

RESPONSES TO QUESTION 2

1. D

2. D

3. D

4. D

5. D

6. D

7. D

8. D

1.1 Report your results for both scenarios. Are they consistent with what other researchers have found?

Q1. Expected gift value in B= 1000*0.25+0*0.75 = 250

Option B is better than option A, we choose B. ( more gain)

Q2. Expected loss in D=1000*0.75+0*0.25 =750

Option C is better than option D, we choose C. ( less loss).

This is not consistent with the researchers have found.

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