A Decision Maker Who Is Considered to Be a Risk

question 10

Essay

A decision maker who is considered to be a risk taker is faced with this set of probabilities and payoffs
For the lottery p(80)+ (1 − p)(−50),this decision maker has assessed the following indifference probabilities
Rank the decision alternatives on the basis of expected value and on the basis of expected utility.
$$\begin{array} { r c } \text { Payoff } & \text { Probability } \\50 & .60 \\20 & .35 \\10 & .25 \\5 & .22 \\0 & .20 \\- 10 & .18 \\- 25 & .10\end{array}$$

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Math Test

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