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People who are likely to be poor are more likely to side with the investor rather than the investment bank. But perhaps there are just as many people, who are

People who are likely to be poor are more likely to side with the investor rather than the investment bank. But perhaps there are just as many people, who are not poor, who do not trust investment bankers as there are who do trust investment bankers.

cbr 12y ago
Let's make a very simple model: poor? side with investor 100% of the time rich? equally likely to side with either And again for simplicity, before they ask you what your income is say they think you're equally likely to be poor or rich, and that this is the first question. Before they ask the question they think there's a 50% chance you're poor and will definitely side with the investor and a 50% chance you're rich and will side with either. In other words they think you're 75% likely to side with the investor. Then they ask you the question. If you say you're poor then they both update your probability upwards from 75% to 100%, if rich then downwards from 75% to 50%.