Overview

fair gamble


Show Summary Details

Quick Reference

A gamble with an expected pay-off of zero. For example, consider a gamble that involves winning £2 with probability 1/3 and losing £1 with probability 2/3. The expected pay-off is (1/3)2 − (2/3)1 = 0. A fair gamble is said to have actuarially fair odds. Someone who is strictly risk-averse will not accept a fair gamble.

Subjects: Economics.


Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.