consider a decision maker who, when confronted with a choice between a lottery that would give...

 

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consider a decision maker who, when confronted with a choice between a lottery that would give her 4 for sure and a lottery that would give her 10 with probability, 4 with probability, and 0 with probability, would strictly prefer the first lottery and, when confronted with a choice between a lottery that would give her 4 with probability and 0 with probability and a lottery that would give her 10 with probability second lottery. and 0 with probability, would strictly prefer the Show that these preferences violate the independence axiom. consider a decision maker who, when confronted with a choice between a lottery that would give her 4 for sure and a lottery that would give her 10 with probability, 4 with probability, and 0 with probability, would strictly prefer the first lottery and, when confronted with a choice between a lottery that would give her 4 with probability and 0 with probability and a lottery that would give her 10 with probability second lottery. and 0 with probability, would strictly prefer the Show that these preferences violate the independence axiom.

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The violation of the independence axiom in decision theory occurs when an individuals preferences be... View the full answer