Question
Business condition brisk Business condition slow Buy 90 -10 (minus 10) Rent 70 40 Lease 60 55 A business owner is trying to decide whether
| Business condition brisk | Business condition slow |
Buy | 90 | -10 (minus 10) |
Rent | 70 | 40 |
Lease | 60 | 55 |
A business owner is trying to decide whether to buy, rent, or lease office space in an environment where the states of nature describe business conditions as either brisk or slow. The payoffs are in the above nearby table. If the probability of brisk business is .40 and for slow business is .60, and if the highest and lowest payoffs have utility 10 and 0, respectively, and if payoffs 70, 60, 55 and 40 have indifference probabilities .5, .4, .3, and .1, respectively, then which decision maker is
A. risk neutral
B. risk loving
C. risk averse
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