Consider the following two decision-making scenarios:
Scenario 1: You receive $100, and then choose between:
A) A sure loss of $75;
B) Gambling with 75% chance to lose $100, and 25% chance to lose nothing.
Scenario 2: Choose between:
C) A sure win of $25;
D) Gambling with 25% chance to win $100, and 75% chance to win nothing.
What would you predict about people’s preferences in these two scenarios: would most people prefer one of the options, or people would prefer them equally,