Question

Below are probability distributions for two random variables that represent how much money you could win if youplayed two separate games. Which game is more desirable?

Answer 1

It depends whether you are willing to risk losing money:

Considering that in the first option the probability of losing money is much higher, although the probability of making money is also very high.

On the other hand, in the second option the probability of losing money is relatively low, although the probability of making money is also lower than in the first option.

So, If you are willing to take a greater risk of losing money, in order to have the possibility of earning more money, the most viable option is the first.

If, on the other hand, you do not want to take such a high risk of losing money, the best option for the player would be the second.