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Assume that the beginning wealth of Ahmed is $100 and his utility at various levels of wealth is: U(100) = 20; U(110) = 24; and
Assume that the beginning wealth of Ahmed is $100 and his utility at various levels of wealth is: U(100) = 20; U(110) = 24; and U(200) = 36. Assume Ahmed has a choice between two games : In the first game, Ahmed has a 10% chance to get $100 and a 90% chance to get $0. In the second game he has 50% to get either $10 or $0. What game Ahmed should choose ? Why
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