axokappa06
New member
- Joined
- Mar 5, 2017
- Messages
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Suppose that a decision maker’s risk attitude toward monetary gains or losses x given by the utility function u(x)=(10,000+X)^(1/2)[/FONT][FONT="] . Suppose that a decision maker has been given a lottery ticket for free. Suppose that the lottery winning is $500,000, and the chance of winning is one in a thousand. What is the minimum price that the decision maker would be willing to sell the ticket for?
I was able to follow along with the other post ([/FONT]https://www.freemathhelp.com/forum/...risk-attitude-toward-monetary-gains-or-losses[FONT="]) but I am having issues solving for what we should sell the ticket for. [/FONT]
Suppose that a decision maker’s risk attitude toward monetary gains or losses x given by the utility function u(x)=(10,000+X)^(1/2)[/FONT][FONT="] . Suppose that a decision maker has been given a lottery ticket for free. Suppose that the lottery winning is $500,000, and the chance of winning is one in a thousand. What is the minimum price that the decision maker would be willing to sell the ticket for?
I was able to follow along with the other post ([/FONT]https://www.freemathhelp.com/forum/...risk-attitude-toward-monetary-gains-or-losses[FONT="]) but I am having issues solving for what we should sell the ticket for. [/FONT]