ger's utility/u as a function of wealth/w is u = { ln w, w < 1600 w1/2, w >= 1600 Roger has $1000 and 3 options. 1. spend $400 to enter the game with probabilities of winning or losing: Win/(Lose) (500) 0 1000 3000 P(Win/(Lose)) 0.2 0.1 0.6 0.1 a. Show with workings which option roger would choose.
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Roger's utility/u as a function of wealth/w is
u = { ln w, w < 1600
w1/2, w >= 1600
Roger has $1000 and 3 options.
1. spend $400 to enter the game with probabilities of winning or losing:
| Win/(Lose) | (500) | 0 | 1000 | 3000 |
| P(Win/(Lose)) | 0.2 | 0.1 | 0.6 | 0.1 |
a. Show with workings which option roger would choose.
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