2) Solve the problem with Ellsberg paradox and compare alternatives (10 points): An urn which contains...

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2) Solve the problem with Ellsberg paradox and compare alternatives (10 points): An urn which contains 200 blue balls and 400 black or yellow balls in an unknown proportion. A person is given a choice to bet on the outcome of the draw to be Blue or to be Black and another choice to bet on whether the outcome will be Blue or Yellow or whether it will be Black or Yellow. In each case the person wins Euro if the color he bets upon does indeed show up, otherwise nothing is gained or lost. Number of balls BET ON Blue Black Blue or Yellow Black or Yellow Symbol BBB B or Y B or Y 100 Blue 1 0 1 0 Black 0 1 0 1 60 Yellow 0 0 1 1 2) Solve the problem with Ellsberg paradox and compare alternatives (10 points): An urn which contains 200 blue balls and 400 black or yellow balls in an unknown proportion. A person is given a choice to bet on the outcome of the draw to be Blue or to be Black and another choice to bet on whether the outcome will be Blue or Yellow or whether it will be Black or Yellow. In each case the person wins Euro if the color he bets upon does indeed show up, otherwise nothing is gained or lost. Number of balls BET ON Blue Black Blue or Yellow Black or Yellow Symbol BBB B or Y B or Y 100 Blue 1 0 1 0 Black 0 1 0 1 60 Yellow 0 0 1 1