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Unformatted text preview: 4) Dixit and Skeath, Chapter 7, Exercise 3 5) Dixit and Skeath, Chapter 7, Exercise 6 6) Susan faces three possible outcomes yielding possible money payoffs, $a < $b < $c. She prefers gamble A to gamble B to gamble C to gamble D, where the table below shows the probability of each money prize. Gamble $a $b $c A .3 0 .7 B .1 .4 .5 C .3 .2 .5 D .45 0 .55 Are these preferences consistent with Susan having a utility function over the money payoffs with the expected utility property? If so, find such a utility function. If not, show why not....
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 Spring '07
 Emre
 Economics, Game Theory, Utility, subgame perfect equilibrium, possible money payoffs

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