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Ratio bias. Gamblers will desire gambles with worse odds that happen to be drawn from a large sample (e.g., drawing 1 red ball from an urn that contains 89 crimson balls and eleven blue balls) to raised odds that are drawn from a little sample (drawing a single pink ball from an urn containing nine red balls and a person blue ball).[60]
In financial phrases, this conflicted selection is usually modeled being a trade-off between the outcome utility gained by hedging (e.g., revenue) as well as the diagnostic expenditures it incurs (e.g., disloyalty). People make inferences about their beliefs and identification from their actions. If someone is unsure about an aspect of her or his identity, including the extent to which she or he values a candidate or crew, hedging may well sign to him or her that they is not as devoted to that candidate or team as he / she at first thought. In case the diagnostic cost of this self-sign and the resulting identity change are substantial, it might outweigh the end result utility of hedging, and he / she may possibly reject even really generous hedges.[fifty nine]
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