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Behavioral Economics ECOI14234 (202600-4286)
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Two cab companies operate in Paris, the Blue and the Green (according to the color of cab they run). 85% of the cabs in the city are Blue, and the remaining 15% are Green.A cab was involved in a hit-and-run accident at night. A witness later identified the cab as a Green cab. The court tested the witness’ ability to distinguish between Blue and Green cabs under nighttime visibility conditions. It found that the witness was able to identify each color correctly about 80% of the time, but confused it with the other color about 20% of the time.
What's the probability that the delinquent cab was actually green?
When you roll two fair dice, what is the probability of getting at least one "six"?
What is the conjunction fallacy about?
When you roll two fair dice, what is the probability of getting exactly one "six"?
Do crossing indifference curves like the ones below satisfy all axioms of rational decision-making under certainty?