main

prev        

Statement of a problem № m41164

        next    

Consider four gambles X1, X2, X3, and X4, for which the probability distributions of the gains are as follows: Pr(X1 = 0) = 0.2, Pr(X1 = 1) = 0.5, Pr(X1 = 2) = 0.3; Pr(X2 = 0) = 0.4, Pr(X2 = 1) = 0.2, Pr(X2 = 2) = 0.4; Pr(X3 = 0) = 0.3, Pr(X3 = 1) = 0.3, Pr(X3 = 2) = 0.4; Pr(X4 = 0) = Pr(X4 = 2) = 0.5. Suppose that a person’s utility function is such that she prefersX1 toX2. If the person were forced to accept either X3 or X4, which one would she choose?




New search. (Also 1294 free access solutions)

Online calculators