Suppose a leader has to decide whether to go to war. If she goes to war and wins, she gets a payoff of 100. If she goes to war and loses, she gets a payoff of 0. The probability of winning is 70 percent. She is offered a compromise payoff of 75, which she rejects. What does this imply about her attitude toward risk?

a. She is risk-averse.
b. She is risk-neutral.
c. She is risk-acceptant.
d. We cannot tell.


Ans: c

Political Science

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