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For the St Petersburg Parabox, do the following: (i) Calculate the expected monetary value of the game. (ii) Assume that the utility function is u(x)
For the St Petersburg Parabox, do the following:
(i) Calculate the expected monetary value of the game.
(ii) Assume that the utility function is u(x) = ln(x). Calculate the expected utility value of the game and the number of the tosses needed to reach this value. And what is the corresponding cash equivalence of the game? [Hint: Present the calculation for the accuracy up to 4 decimal points.]
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