Which of the following describes the pseudocertainty effect?
a. People are more willing to pay to reduce their risk from 10 down to zero than they are to reduce their risk from 50 down to 40.
b. People are more willing to pay for a warranty plan that completely covers 30 of the possible problems rather than a plan that covers all problems with 30 probability.
c. Rather than being offered a complete reduction of risk on certain problems and no reduction on others, you are offered a reduced risk on a variety of problems.
d. All of the above.
Question 2
Which of the following describes the certainty effect?
a. People are more willing to pay to reduce their risk from 10 down to zero than they are to reduce their risk from 50 down to 40.
b. People are more willing to pay for a warranty plan that completely covers 30 of the possible problems rather than a plan that covers all problems with 30 probability.
c. People are more willing to take a vaccine that has 100 protection for one strain of a disease and 0 protection for another strain of the disease, than a vaccine that offers 50 protection for both strains of the disease.
d. All of the above.
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