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Need help solving the blank spaces. Thank you! In a certain state lottery, a lottery ticket costs $2. In terms of the decision to purchase
Need help solving the blank spaces. Thank you!
In a certain state lottery, a lottery ticket costs $2. In terms of the decision to purchase or not to purchase a lottery ticket, suppose that the following payoff table applies. (a) A realistic estimate of the chances of winning is 1 in 250,000 . Use the expected value approach to recommend a decision. If required, round your answers to two decimal places. For subtractive or negative number use a minus sign (Example: 300 ). If your answer is zero enter " 0 ". EV(d1)=EV(d2)= Recommended decision: (b) If a particular decision maker assigns an indifference probability of 0.000001 to the $0 payoff, would this individual purchase a lottery ticket? Use expected utility to justify your answer. If required, round your answers to six decimal places. EU(d1)=EU(d2)= Purchase a lotery ticketStep by Step Solution
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