Statement of a problem № m41053


Consider a utility function U for which U(0) = 0 and U(100) = 1. Suppose that a person who has this utility function is indifferent to either accepting a gamble from which his gain will be 0 dollars with probability 1/3 or 100 dollars with probability 2/3 or accepting 50 dollars as a sure thing. What is the value of U(50)?

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