ADVANCED ANALYSIS A mathematically fair bet is one in which a gambler bets, say, $100, for a
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ADVANCED ANALYSIS A mathematically “fair bet” is one in which a gambler bets, say, $100, for a 10 percent chance to win $1000 dollars ($100 .10 $1000). Assuming diminishing marginal utility of dollars, explain why this is not a fair bet in terms of utility. Why is it even a less fair bet when the “house” takes a cut of each dollar bet? So is gambling irrational?
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