We play two games simultaneously this week, but they shouldnt take you long. Dont spend more than a couple of minutes deciding on your strategy in each game. But read all of these instructions before doing anything. Be sure to post your choices by 9:59 pm on Wednesday night. Rules & Instructions for Game A: Game A: The Raffle 1. A philanthropist who is interested in healthcare and behavioral economics has donated a new electric car for the prize in our university raffle. 2. We have 10,000 raffle tickets to sell. 3. The price is printed on each ticket: Price: $0. 4. How many tickets do you want? 5. Post your answer in the Forum Week 6, Games A & B by creating your own thread in that Forum, but dont post anything until youve finished reading these instructions. You should put your choices for both games together in the same post. Game B: Skydiving in Sweden and in the US.

Review the following table.1

Chance of an Injury (but Not a Fatality) from Skydiving in Sweden

Men Injured Men Injury Rate per jumper, Men Women Injured Women Injury Rate per jumper, Women Total People Total Injuries Injuries per jumper Injury Rate per 1000 jumpers

1999 2245 24 535 16 2780 40 0.01438849 14 2000 2574 36 584 14 3158 50 0.01583281 15 2001 2721 44 652 15 3373 59 0.01749185 17 2002 2543 38 301 14 2844 52 0.01828411 18 2003 2369 39 516 17 2885 56 0.01941075 19

Fiveyear Period 12452 181 0.0145358 2588 76 0.02936631 15040 257 0.01708777 17

You should assume, as skydiving enthusiasts assure us,2 that fatalities from skydiving are very rare and therefore will not be part of our calculation, although in my view, the parachutists comparisons to other risky activities understate the risks of skydiving. In other words, for the purpose of this game, assume that the chance of a fatal injury is zero. The chance of a non-fatal injury, based on the Swedish data above, which we assume is the same as in the US, is 17 per thousand jumps (Ive combined men and women together). To make the arithmetic a little easier (dont spend a lot of time on the math here), lets round that to 20 per thousand jumps, which is, of course, 2%. Rules & Instructions for Game B 1. You will receive an e-mail on Monday morning indicating whether you are in the uninsured group or the insured group for Part 1 of the game, and whether you have bronze insurance or platinum insurance in Part 2 of the game (everyone has health insurance for Part 2). 2. The health insurance in Part 1 (if you have it) and Part 2 (everyone has it) is full insurance; it covers all medical expenses. 3. You have a gift certificate to go skydiving once a lesson and a jump and youve always wanted to go skydiving. 4. If you go skydiving once, your chance of suffering an injury is 2 in 100 (2%) (or, pINJURY = 0.02), and that injury will cause $10,000 of healthcare expenses and $1,000 of lost pay.3 5. Part 1 of Game B: Considering only your desire to go skydiving, whether you have health insurance, the chance of an injury, and the injurys cost as stated in these rules, will you go skydiving? Post your answer in the Forum Week 6, Games A & B by using the thread you created in Game A (you should use the same post). Be sure to indicate whether you have insurance. Dont post anything until youve finished reading these instructions.

Part 2 of Game B: Assume now you went skydiving and you injured your leg. Two treatments are available: (a) traditional bone-setting surgery with immobilization during recovery, which costs $10,000 and will force you to miss work and lose $1,000 in income, or (b) bone-setting and treatment with a newly approved medicine, Novossify, which costs $20,000, but cuts recovery time in half so that your lost pay is only $500. Both the bronze health insurance policy and the platinum policy fully cover treatment (a), but only the platinum plan covers treatment (b), which it covers in full. Considering whether you have bronze insurance or platinum insurance and your lost wages, which treatment would you choose? For Game 6, Part 2A, you do NOT have insurance.

For Game 6, Part 2B, you have a PLATINUM insurance policy