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Question: Presenting bets as a probability or relative frequency. Tunney (2006) was interested in various probability relationships. Specifically, he was interested in how the presentation of probabilities (either as a probability or as a frequency) influenced participant choices. The following is an example of how he presented bets for frequency and probability. Both statements say the same thing for each bet but in different ways.

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Based on this table,

(a) what is the mathematical expectation for winning the P-bet, and

(b) what is the mathematical expectation for winning the £-bet? Based on the mathematical expectation of making P-bets and £-bets,

(c) if you had to make one bet, which one would you make? Explain.

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