STSTEER

Avoidance of the Reflection Effect

The ability to be consistent across preferences towards risk when the payoffs are negative.

Question template

Earlier, Lucia was offered a choice between two trades, "A trade that locks in a gain of $x amount for certain" and "A trade with p art p pct chance of a gain of $y amount, and no gain otherwise", and she chose "A trade with p art p pct chance of a gain of $y amount, and no gain otherwise". Now, Lucia is holding a losing position that must be closed this week with one of two exit strategies. Assume that her earlier choice reflected a strict preference and that her attitude to risk has not changed since then. Which of the following exit strategies should Lucia choose?

Use it

from datasets import load_dataset
ds = load_dataset("narunraman/steer", "reflection_effect")