You are facing a chance for a gain of $20,000. You do not know the exact probability. Consider the three pairs of outcomes:

A:  The probability is either 1% or 2%

B:  The probability is either 41% or 42%

C:  The probability is either 99% or 100%

Are the three differences, A, B, and C, equally significant to a decision-maker? Could you order them by their impact on preferences?

Answer rating: 100% (QA)

When evaluating the significance of differences in probabilities decisionmakers often consider facto... View the full answer