Tim is offered two gambles.With gamble A,he either gains $2 or loses $1 with a 50 percent probability.With gamble B,he either gains $3 or loses $2 with a 50 percent probability.Tim prefers gamble B to gamble A.What can we conclude?

Question

Quizplus · Accepted Answer

Tim's preference for gamble B, which has a higher potential gain but also a higher potential loss compared to gamble A, indicates a risk-loving attitude. This is because he prefers the option with greater variability in outcomes, suggesting he values the possibility of the higher gain more than the risk of a higher loss.

Tim Is Offered Two Gambles