Table 1

Example Figure 3 Worlds That Are Compatible and
Incompatible With a C ( 1, s
c ) = $ 30 Price

sc Compatible? Example
Worlds
C(1,sc) a(1,0) p(1,sw)

m(1,sw)

States of World w Is sc
Equal to
sw?
                     
Yes w = 1 $ 30   .60 .99 0.61 sw = + 0.65 Boom
(severe)
Possible?
Yes w = 2 30   .60 .90 0.67 sw = + 0.50 Boom Possible?
Yes w = 3 30   .60 .80 0.75 sw = + 0.33 Boom Possible?
Yes w = 4 30   .60 .70 0.85 sw = + 0.18 Boom Possible?
Yes w = 5 30   .60 .60 1.00 sw = + 0.00 Neutral Possible?
Yes w = 6 30   .60 .50 1.20 sw = - 0.20 Depression Possible?
Yes w = 7 30   .60 .40 1.50 sw = - 0.50 Depression Possible?
Yes w = 8 30   .60 .30 2.00 sw = -1.00 Depression Possible?
Yes w = 9 30   .60 .20 3.00 sw = - 2.00 Depression Possible?
Yes w=10 30   .60 .20 6.00 sw = - 5.00 Depression Possible?
Yes w=11 30   .60 .05 12.00 sw = - 11.00 Depression Possible?
Yes w=12 30   .60 .01 60.00 sw = - 59.00 Depression
(severe)
Possible?
                     
No w=13 30   .61 .01 61.00 sw = - 59.00 Depression
(severe)
No!
No w=14 30   .61 .51 1.20 sw = - 0.20 Depression
(mild)
No!
No w=15 30   .59 .98 0.61 sw = + 0.65 Boom
(severe)
No!
No w=16 30   .61 .99 0.62 sw = + 0.64 Boom
(severe)
No!
No w=17 30   .425 .50 0.85 sw = + 0.18 Boom
(mild)
No!
No w=18 30   .00 .00 0.59 sw = + 0.69 Boom
(severe)
No!