How do price expectations influence people’s behavior? Evaluate the risk of your imagined short and long positions, using common sense ideas of risk. 

Price expectations can have a big influence on people’s behavior, particularly when it comes to investing. For instance, an investor who has high price expectations will be more likely to take risks with their investments in order to meet those goals, while an investor with lower price expectations may opt for safer strategies.

When considering the risk of short and long positions in terms of common sense ideas of risk, the short position generally carries higher risk because you are betting that the price of a security will decrease over time, which is always difficult to predict accurately. On the other hand, a long position is typically seen as less risky since you are betting that the price of a security will increase over time which is usually easier to predict due to general trends in markets.

Ultimately, understanding how price expectations can influence people’s behavior when it comes to investing can help investors make more informed decisions and better manage their own risk tolerance levels. By taking into account both one’s own personal financial goals as well as general market conditions before entering into any type of investment position, investors should be able to minimize their overall exposure and optimize potential returns regardless if they decide upon a short or long position.