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Some questions reached me regarding the meaning of utility over outcomes/wealth: for each of the three persons the utility is over the money in each
Some questions reached me regarding the meaning of "utility over outcomes/wealth": for each of the three persons the utility is over the money in each person's pocket. I.e. if they do not play the lottery, then they all have 25 and evaluate this with their respective utility function. If they do play the lottery, they have 25-what they pay for the lottery+what they get out of the lottery. Since they pay 21 to play the lottery and receive 10 with prob 1/2 and 30 with probability 1/2, they have 14 with prob 1/2 and 34 with prob 1/2.
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