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Consider the following decision problem S1 (.25) S2 (.25) S3 (.5) Action 1 $25 $25 $49 Action 2 $0 $100 $36 Action 3 $0 $0
Consider the following decision problem
S1 (.25) S2 (.25) S3 (.5)
Action 1 $25 $25 $49
Action 2 $0 $100 $36
Action 3 $0 $0 $81
a. Suppose the decision makers utility u of money is linear. Which action should be chosen according to PMEU?
b. Suppose the decision makers utility u of money is given by u(x) = square root of x. Which act should be chosen by PMEU?
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