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# Consider the following options: Lottery A. Take \$1 million for sure . Lottery B. Get \$5 million with probability 0.9 (and nothing otherwise)....

3. Consider the following options:

Lottery A. Take \$1 million for sure .

Lottery B. Get \$5 million with probability 0.9 (and nothing otherwise).

Lottery C. Get \$1 million with probability 0.1 (and nothing otherwise).

Lottery D. Get \$5 million with probability 0.9 (and nothing otherwise).

(By the way, how would you rank A vs. B and C vs D?)

For the DM to be consistent with Expected utility hypothesis, we must have

I would rank B and D first, A second,... View the full answer

1 comment
• How about A is strictly preferred to B if and only if D is strictly preferred to C ？
• DukeScienceHedgehog3035
• May 04, 2018 at 11:56pm

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