Define consequences in terms of decision theory. What will be ...

[nramada]

Define consequences in terms of decision theory.
 
  What will be an ideal response?

Question 2

Describe a situation in which a reversal of preference would likely occur.
 
  What will be an ideal response?

[samiel-sayed]

Answer to Question 1

Answer: Consequences are the benefits or losses associated with a particular choice. Consequences can be described by their outcomes or results, value or worth, and utility or desirability.

Answer to Question 2

Answer: When asked to choose between a high-probability event (e.g., 8/9 chance of winning 4; otherwise nothing) and a large return event (e.g., 1/9 chance of winning 40; otherwise nothing) research participants tend to choose the high-probability event. However, if participants assumed that they owned the rights to the events and were then asked to sell the events, they requested a higher amount for the large return event. This example is based on the one used in the text. Students can vary from this but should include a high-probability event versus a high-return event.

[nramada]

TYSM

[amcvicar]

Excellent