Expected Utility

Imagine I offer you a gamble. I will spin the wheel that looks like this:

And you win the amount of money that it will choose. If it hits a negative number you owe me that much. Should you play or not?


Sunk Cost Fallacy

Let’s say you’ve been planning to go see a movie this Friday, and have already bought a ticket, but now that it’s time to go out you realize that you don’t want to go, and that you would rather enjoy spending your evening at home. Should you go or not?