[Yobz]

My sociology professor wanted to prove a point about risk and how people react to it (more psychology, but it related to what we are talking about). Anyway, she put these stats up on the projector:
18% of people chose to have a 45% chance of winning 6,000
82% of people chose to have a 90% chance of winning 3,000
Even though the expected values are the same, people chose the one with higher probability more.
On the other hand, we have a similar situation:
78% of people chose to have a 0.001% chance of winning 6,000
22% of people chose to have a 0.002% chance of winning 3,000
Once again, the expected value is the same, but the voting was clearly skewed.

I argued, in the first case, that it makes sense to chose the 3,000 with 90% chance because you only get 1 try and you start with a bankroll of 0 while she kept insisting that it did not make a difference. Who is right (along w/the math please) and what about the second situation?

Thanks guys, first post in probability [img]/images/graemlins/smile.gif[/img]