In Probability Theory Exhaustive Events Are Best Described as Events

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If two independent events occur whose joint probability is the product of their individual probabilities then the information we get from observing the events is the sum of the two information. I p1 p2 I p1 I p2.


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Tversky and Kahneman 1992 introduced a different type of relative comparison into the evaluation of risky choice options related to the 100 example aboveAs shown in Figure 104a PT replaces the utility function u of EU theory with value function v which is defined not over absolute outcomes and resulting wealth levels but.

. Kahneman and Tversky 1979. I p is monotonic and continuous in p. I 1 0.

If an event has probability 1 we get no information from the occurrence of the event.


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