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The zero effect is a slight adjustment to the certainty effect that states individuals will appeal to the lottery that doesn't have the possibility of winning nothing (aversion to zero). During prior Allais style tasks that involve two experiments with four lotteries, the only lottery without a possible outcome of zero was the zero-variance ...
Individuals make no difference to the outcome, “much as single molecules make no difference to the properties of the gas" [citation needed] (Herbert, G). This is a weakness of rational choice theory as it shows that in situations such as voting in an election, the rational decision for the individual would be to not vote as their vote makes ...
He proposed that a nonlinear function of utility of an outcome should be used instead of the expected value of an outcome, accounting for risk aversion, where the risk premium is higher for low-probability events than the difference between the payout level of a particular outcome and its expected value. Bernoulli further proposed that it was ...
Plausible reasoning can be tested, and by this means, confirmed or refuted. Probing into plausible reasoning in a dialogue is a way of testing it. Plausible reasoning admits of degrees by testing, but of a kind different from those the standard probability values and Bayesian rules used in Pascalian probability
[58] He argues that one of the main reasons for introducing rule utilitarianism was to do justice to the general rules that people need for moral education and character development and he proposes that "a difference between act-utilitarianism and rule-utilitarianism can be introduced by limiting the specificity of the rules, i.e., by ...
Positive economics as a science concerns the investigation of economic behavior. [4] It deals with empirical facts as well as cause-and-effect relationships. It emphasizes that economic theories must be consistent with existing observations and produce precise, verifiable predictions about the phenomena under investigation.
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A key distinction is between deductive and non-deductive arguments. Logical reasoning is a mental activity that aims to arrive at a conclusion in a rigorous way. It happens in the form of inferences or arguments by starting from a set of premises and reasoning to a conclusion supported by these premises.