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Bettors tend to choose to bet on favorites in athletic competitions, and at times will acknowledge even bets on favorites when supplied a lot more favorable bets about the less likely end result (e.g., an underdog crew).[57]
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In financial conditions, this conflicted selection is usually modeled as a trade-off concerning the result utility received by hedging (e.g., revenue) and the diagnostic fees it incurs (e.g., disloyalty). individuals make inferences regarding their beliefs and identification from their actions. If a person is uncertain about an facet of their id, including the extent to which she or he values a applicant or workforce, hedging could signal to him or her that she or he is not as committed to that applicant or staff as he / she originally considered. When the diagnostic cost of this self-sign and also the ensuing id change are considerable, it may outweigh the result utility of hedging, and she or he may possibly reject even pretty generous hedges.[59]
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