Given the utility function uw w- vw and initial endowment, Basic Statistics

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Given the utility function uw w- vw and initial endowment

Question: Given the utility function u(W) = W- vW and initial endowment of $100 Outcome (Probability)

Payoff Lottery 1 Payoff Lottery 2 Payoff Lottery 3

H(0.50) 5 9 8

T(0.50) -2 -5 -3

a. Calculate the expected payoff of each lottery.

b. Rank the three lotteries according to the expected dollar winnings.

c. Calculate the expected utility of each lottery.

d. Rank the three lotteries according to the expected utility.

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Basic Statistics: Given the utility function uw w- vw and initial endowment

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Basic Statistics: Given the utility function uw w- vw and initial endowment

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