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Mathematics, 11.06.2020 16:02 isabellemaine
g Suppose you have $100 of endowment, and you are offered a chance to buy a lottery which costs $36. The lottery has 18% of chance to win a prize of $G, or you just lose and get nothing. Suppose your utility function on wealth is U(w)=\sqrt{w}. What is the least prize size G that you will be willing to buy the lottery?
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