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A Decision Maker Who Is Considered to Be a Risk

Question 10

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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
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} Rank the decision alternatives on the basis of expected value and on the basis of expected utility.
 Payoff  Probability 50.6020.3510.255.220.20−10.18−25.10\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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