Risk

Answer choices

1. A

   Too Strong: generally misled4% picked this

   When states try to regain losses through risky conflict, they generally are misled by inadequate or inaccurate information as to the risks

   The author thinks that when states try to regain losses, they will tolerate much more risk than if they are trying to procure some new win. But the author thinks that this is because of our different emotional (subjective) reactions to gains / losses. In the example of the 50/50 wager, people won't risk $100 to make $200. Their risk tolerance is out of whack with actual probability, but not because they are misled by inaccurate information. They just know their differing emotional reactions to good news and bad news.

   4%
2. B

   Correct46% picked this

   Government decision makers subjectively evaluate the acceptability of risks involving national assets in much the same way that they would

   Why this is right

   This is supported by the first sentence of the final paragraph. The author is saying that, "such observations (as the one just made at the end of the 2nd paragraph) are quite salient to scholars of international conflict and crisis. For example ..." The end of the 2nd paragraph said that recent studies have observed that risk-accepting strategies are common when the alternative to a sure loss is a high risk long-shot chance at no loss. The first sentence of the 3rd paragraph is saying "this psychological fact we've determined about consumers / entrepreneurs" is very relevant to people who study the government decision makers involved in international conflict and crisis. So the author is assuming that there are parallels. The sort of risk psychology being used at the individual level in these experiments would be likely to play out on an international level with the emotional decision making of the various power players.

   Skill tested: Author Opinion · how this choice captures the passage's function is the move to repeat next time.

   46%
3. C

   Out of Scope: synthesis of fields9% picked this

   A new method for predicting and mediating international conflict has emerged from a synthesis of the fields

   The big insight the author thinks applies to international conflict is one that comes from "recent investigations into the psychology of decision making". It is at odds with the previous conventional wisdom from economics. There's not really a new method, either. Even if we called the new understanding of risk assessment a new method, it is still an insight that comes purely from psychology of decision making.

   9%
4. D

   Out of Scope: dangerous rationality8% picked this

   Truly rational decision making is a rare phenomenon in international crises and can, ironically, lead to severe consequences for

   There's nothing in the passage that sounds like people acted truly rationally and suffered severe consequences for doing so.

   8%
5. E

   Contradicted33% picked this

   Contrary to previous assumptions, people are more likely to take substantial risks when their subjective assessments of expected benefits match or

   According to this answer, people are most likely to take a big risk when they think the reward will be equal or greater. The point of the 2nd paragraph was that people will not be willing to bet $100 on a 50/50 chance to win $100. The main point of the passage was that people are more likely to take substantial risks when they subjectively feel like it's their own chance to avoid losing something.

   33%