176 ◾ Risk Assessment and Security
showing that the dierence between probabilities of 0.99 and 1.00 has more impact
on preferences than the dierence between 0.10 and 0.11. More recent studies
observed nonlinear preferences in choices that do not involve sure things (Camerer
and Ho 1994).
4.15.3 Source Dependence
People are eager to bet on an uncertain event based on the magnitude of uncer-
tainty and on its source or cause. More recent evidence indicates that people often
prefer to bet on an event although the former probability is vague and the latter is
clear (Heath and Tversky 1991).
4.15.4 Risk Seeking
Risk aversion is immediately assumed in economic analysis of decision under uncer-
tainty. It is a behavior when a person exposed to uncer ...