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express the situation in a ga
this:
ame-theoretical way, what we have is something simila
ar to
Let
be the action 'Try
that the bank were open on
y to deposit on Saturday', and 0
p
1 the probabi
Saturday. Consider also the expected value E[
ility
.
ʱ
] of
ʱ
Fig. 1.
[
] (the red line) is always positive (Fig. 1.). The challe
onsequence, no revision needs to be made and
does
degree of reliance on the belief is already enough
ws that the bank is open the following day. In the
h
der for E[
] to be positive the probability,
p
, of being o
r than 0.9 (see the blue line). But is Hannah sure enough
n 0.9? The challenge is harder to take. The revision ne
he original
will have to be reconsidered before Han
ws that 'the bank is open the following day
for sure
'.
In the
low stakes
case E[
is not hard to take. As a co
change. Hannah's current
Hannah says that she know
stakes
case, however, in ord
on Saturday must be higher
consider
p
to be higher tha
to take place and with it th
may say again that she know
enge
not
and
high
pen
h to
eeds
nnah
