Safe Brave 2, Copy Copy Innovate Innovate 5/2 5/12 10/10 10/6 Assume player 2 believes player 1 plays "safe" with probability p and "brave" with probability 1-p. What it the highest p so that a risk-neutral player 2 to should play "copy"? Please give an answer with two decimal places. 2.
Q: an expected utility maximiser owns a car worth £60 000 and has a bank account with £20 000. The…
A: Expected utility maxi-miser:- In economics, the anticipated utility hypothesis is a well-known idea…
Q: There are N sites that need protection (number them 1 to N). Someone is going to pick one of them to…
A:
Q: Person D is offered a the same game, for a price of £1.8. They decide are indifferent between…
A: A risk netrual person wil always be indifference between taking a lottery and not taking one. He is…
Q: Jane loves risk; her Bernoulli utility function is given by u(w) = w². She participates in a ottery…
A: Given information: Jane is a risk lover and its utility function is given below: u = w2 where 'w' is…
Q: Jan wealth W = 100, has a utility function with respect to wealth of U = .5W^(2) , and faces a…
A: Given: U=0.5W^(2)
Q: Jamal has autility function U=W1/2,where W is his wealth in millions of dollars and U is the…
A: The individual choice of investment is highly affected by the risk involved in the investment. The…
Q: A person has an expected utility function of the form u(w) = w0.5 . He initially has wealth of $4.…
A: In economics, utility refers to the level of satisfaction that a consumer gets from the consumption…
Q: Lottery A refers to a lottery ticket that pays $2,000 with probability 0.2, $4,000with probability…
A: The expected value, EV, of the lottery is equal to the sum of the returns weighted by their…
Q: Question 4 Suppose a prosecutor expects to convict a defendant with probability 0.5 and that the…
A: We are going to use incentive and participation constraint to answer this question.
Q: John is a farmer with $225 of wealth. He can either plant corn or beans. If he plants corn, John…
A: Total wealth = $225 Corn: If good weather, then Income (Icg) = $675 If bad weather, then Income…
Q: Given u(x) = x0.5 and Lottery A (below) Lottery A Probability 0.50 |0.25 0.25 Outcome |64 16 For…
A: Given Utility function U(x)= x0.5 Probability of getting 64 is 0.50 i.e. p(64)=0.5…
Q: Angel, Bianca, Clara are independent farmers, and they are deciding which crop to cultivate. They…
A: We have to find p such that for which Clara is indifferent between growing tomatoes and amaranta.…
Q: Question 1) An expected utility maximiser owns a car worth £60000 and has a bank account with…
A: Note:- “Since you have asked multiple question, we will solve the first question for you. If you…
Q: Consider the setup from Questions 1 and 2. How much profits, in expectation, does the insurance…
A: "Expected utility" is an economic phrase that describes the utility that an entity or the overall…
Q: efer to the following table showing the probability distribution of payoffs from an activity to…
A: Ans. The expected value of payoffs is the sum of the product of payoffs and their respective…
Q: In a final round of a MegaMillion TV show, a contestant has won $1 million and has a chance of…
A: Ans in step 2
Q: Yuri owns just one ship, he calls it Previt. The ship is worth $25 million dollars. If the ship…
A: Insurance provides coverage over the risk. For claiming insurance people need to pay the premium and…
Q: A gamble based on a fair coin toss which pays $6.65 if the coin lands heads and $9.85 if the coin…
A: the utility function estimates the government assistance or fulfillment of a customer as a function…
Q: Uncertainty and Insurance 3) There are 3 agents, one risk averse, another risk neutral, and the…
A: Given information 3 agents are given Utility functions of all 3 agents Each agent has wealth = $9…
Q: In the final round of a TV game show, contestantshave a chance to increase their current winnings…
A: Since there is a 50 percent chance to win, the player should play the game. Because there is a 50…
Q: Question 2 A potential criminal enjoys a gain of g > 0 from committing an illegal act. If the…
A: Qe are going to use expectation principle and bayesian probabilty to answer this question.
Q: Suppose that there are two types of entrepreneur: skilled and unskilled. Skilled entrepreneurs have…
A:
Q: Suppose an accident will cause $200 in damages if it occurs. Assume that potential injurers can…
A: Negligence standard (B) can be calculated by using the following formula. The value of P is denoted…
Q: WS. Profit $10,000 T Profit $50,000 = worker 60% 40% worker 20% 80% Internet all day, and he views…
A: *Answer:
Q: Khalid has a utility function U = W1/2, where W is his wealth in millions of dollars and U is the…
A: The utility function is given as, Answer (i) Figure (1) below depicts the given utility…
Q: Max is thinking of starting a pinball palace near a large Melbourne university. His utility is given…
A: The satisfaction derived by an individual when he/she consumes a commodity or avails a service is…
Q: Safe Brave 2. 2 Copy Innovate Innovate 5/12 10/10 10/6 yer 2 believes player 1 plays "safe" with…
A: There are two players in the game : Player 1 & Player 2 Player 1 has two strategies : { Safe ,…
Q: If Rowena mixes 50-50 between her two strategies, what is Colin's expected payoff from playing M…
A: Expected means mean value that is calculated by multiplying probability value with the value of the…
Q: 10. Karl's utility function is U(w) where w is wealth. His initial wealth %3D w+200 300. He…
A: If Karl gambles and wins, he gets 200 and if he gambles and lost, he loses 200. So The total wealth…
Q: ‘Lottery A’ refers to a lottery ticket that pays $2,000 with a probability of 0.3, $8,000 with a…
A: Expected gains = ∑ (probability * gains)‘Lottery A’ refers to a lottery ticket that pays $2,000 with…
Q: 1.) You have determined that if Generics Manufacturer A prevails against the government in court,…
A: 1) It is given that the shares trade at $55 and also the worth of shares in cases of winning or…
Q: Mike has a utility function expressed by U(W)= WO.5 where W stands for wealth (assuming wealth is…
A: Mike utility function is given below: U = W0.5 Where W is wealth ------- A person is said to be…
Q: 1) company. If the company does well, the investor will make a 200% profit in her investment, but if…
A: Profitability: Profitability is the basic objective of all commercial endeavors. The firm will not…
Q: Monty Burns, the owner of the Springfield Nuclear Power Plant, owns many real estate properties. His…
A: Monty's Utility function : U(a) = w0.5 Miss b utility function : U(b) = y (where , y = income )…
Q: The manager of XYZ Company is introducing a new product that will yield N$1000 in profits if the…
A: Formula to calculate: Expected profit = summation (state of economy * Expected profits.
Q: son is trying to sell cars. The number of cars that she will sell depends on her eno "e" and her…
A: Utility maximization is an essential plan by which individuals and companies look to accomplish the…
Q: If your worker works hard there is a 3/5 possibility that revenues will be $150 and a 2/5…
A: Given, worker's utility function :- U = W - C W = wage C = cost of effort Let a high level of effort…
Q: What type of risk behavior does the person exhibit who is willing to bet $60 on a game where 20% of…
A: please find the answer below.
Q: A A 5,3 1,5 2, 7 4, 3 In the unique (mixed strategy) NE, player 1 plays A with what probability?…
A:
Q: 2) Suppose you own a car worth $20,000. You have accident insurance, but your policy does not cover…
A: As the player is risk neutral his utility function would be possibly of the form : U(w) = W Car's…
Q: Consider a risk averse expected utility maximize. He considers two job contracts. The first one pays…
A: The term risk-averse portrays the financial backer who picks the conservation of capital over the…
Q: Joey has utility function 1+√x where x is the amount of money he has. He is... A) Cannot tell from…
A: Given utility function - U = 1+√x
Q: Monty Burns, the owner of the Springfield Nuclear Power Plant, owns many real estate properties. His…
A: Monty's Utility function : U(a) = w0.5 Miss b utility function : U(b) = y (where , y = income )…
Q: At races, your horse, White Rum, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a…
A: The probability of coming 1st = 1/20 , The probability of coming 2nd = 1/10 The probability of…
Q: Any risk-averse individual would always (Select all that applies) a) take a 30% chance at $100…
A: A risk-averse individual would always beleive in accepting low risk investment with low returns,…
Q: Suppose there are two types of people, high ability and low ability. A high-ability person's…
A:
Q: In the final round of a TV game show, contestants have a chance to increase their current winnings…
A: There is a half-half probability of a contestant guessing the answer right and increasing their…
Q: In the final round of a TV game show, contestants have a chance to increase their current winnings…
A: Expected value is the sumproduct of probabilities and the payoff values, positive or negative.…
Q: Microeconomics Wilfred’s expected utility function is px1^0.5+(1−p)x2^0.5, where p is the…
A: "In micro-economics, the certainty equivalent is represented as CE and it is a guaranteed return…
Q: David is an expected-utility maximizer that likes to drive fast (and reckless at times), so his…
A: An expected utility maximiser is a theoretical agent that evaluates its acts, calculates their…
Step by step
Solved in 2 steps
- In the final round of a TV game show, contestantshave a chance to increase their current winnings of$1 million to $2 million. If they are wrong, theirprize is decreased to $500,000. A contestant thinkshis guess will be right 50% of the time. Should heplay? What is the lowest probability of a correctguess that would make playing profitable?In a final round of a MegaMillion TV show, a contestant has won $1 millionand has a chance of doubling the reward. If he loses his winnings drop to$500,000. The contestant thinks his chances of winning are 50%. Should heplay? What is the lowest probability of a correct guess that will make his betprofitable? Show workA salesperson is trying to sell cars. The number of cars that she will sell depends on her effort "e" and her luck. Given her effort e, with probability 4e she is able to sell four cars, and with probability (1 - 4e) she is able to sell only one car. Her personal cost of effort is 100e². The dealership pays her a bonus b for each car sold. The salesperson is risk-neutral, and wants to maximize her expected utility, which is her expected income minus her effort cost. a) Given the bonus b, the salesperson's best response function is b) Suppose the dealership pays b = 2. Then the expected number of cars sold will be E(Q)=
- Player 1 L 20, 12 4,8 10, 2 6,6 R 0, 14 8,4 2,18 6,6 ). If 1 believes that 2 plays a mixed strategy (0.25, 0.75), i.e. with 25% probability of L and 75% probability of R, which of 1's strategies has the highest expected payoff? N E S W N E S W Player 2 2. If 2 actually plays a mixed strategy (0.25, 0.75), i.e. with 25% probability of L and 75% probability of R, which of 1's strategies would give 2 the highest expected payoff? N E S WThe injured football player Bad news everyone! There is 1 second left in the game, and Tom Brady has injured himself. The matrices below depict the relative probabilities of winning givenan offensive and a defensive play call. (The row player is the New England Patriots and the column player is the opponent.) How much has the all star's home team probability of winning decreased due to the injury? Pass uny Patriots D Pass .4, .6 D Run .9,.1 .8,.2 .5,.5 Pass Run Opponent D Pass D Run .06, .94 .32, .68 .8,.2 .5,.5At races, your horse, White Rum, has a probability of 1/20 of coming 1st, 1/10 of coming 2nd and a probability of 1⁄4 in coming 3rd. First place pays $5,000 to the winner, second place $4,000 and third place $1,350.Hence, is it worth entering the race if it costs $1050? Your company plans to invest in a particular project. There is a 40% chance you will lose $3,000, a 45% chance you will break even, and a 15% chance you will make $5,500. Based solely on this information, what should you do? On 1st Jan 2006, a business had inventory of $19,000. During the month, sales totalled $32,500 and purchases $24,000. On 31st Jan 2006 a fire destroyed some of the inventory. The undamaged goods in inventory were valued at $11,000. The business operates with a standard gross profit margin of 30%. Based on this information, what is the cost of the inventory destroyed in the fire?
- Deborah is at the casino and is considering playing Roulette. In Roulette, a ball drops into one of 36 slots on a spinning wheel. 17 of the slots are red, 17 are black, and 2 are green. Each slot is equally likely and occurs with probability 1/36. Deborah bets $1.00 on black. If the ball drops into a black slot she receives $2.00 and if it drops into a red or green slot, she receives nothing. The expected value of Deborah's bet (after subtracting the $1.00 she bet) is $ Given that Deborah makes this bet, she must beDeborah is at the casino and is considering playing Roulette. In Roulette, a ball drops into one of 36 slots on a spinning wheel. 17 of the slots are red, 17 are black, and 2 are green. Each slot is equally likely and occurs with probability 1/36. Deborah bets $1.00 on black. If the ball drops into a black slot she receives $2.00 and if it drops into a red or green slot, she receives nothing. a) The expected value of Deborah’s bet (after subtracting the $1.00 she bet) is $________________ b) Given that Deborah makes this bet, is she risk adverse, risk neutral, or risk loving?(Fill in the 4 blanks.) A monthly pass for the Stockholm subway costs $100, and fare dodgers who are caught face a fine of about $160. Stockholm transport has increased the number of ticket checks conducted, and the probability of being caught while riding the subway without paying is now 1%. Liam rides the subway 50 times a month, so that each month the probability that he is caught equals 50 x 1% = !3! 50% and he expects to pay 50 (0.01 x $160) = $80 in fines each month he rides the subway without buying the monthly pass. If Liam does not purchase a monthly pass, his expected monthly savings are $ (accepted format is dollars and cents xXx.xx). Liam's utility of saving $S equals VS , so that if he does not purchase a monthly pass, his expected utility equals (round to 2 decimals: xxx.xx). Liam's certainty equivalent is savings equal to $52.42, and thus Liam's (do not capitalize your answer and make sure to spell correctly) is $7.58. Liam can purchase full insurance from Planka.nu,…
- A lottery has a grand prize of $1,000,000, 2 runner-up prizes of $100,000 each, 6 third-place prizes of $10,000 each, and 19 consolation prizes of $1,000 each. If a 4 million tickets are sold for $1 each, and the probability of any ticket winning is the same as that of any other winning, find the expected return on a $1 ticket. (Round your answer to 2 decimal places.2.4 The opening 2018 World Cup odds against being the winning team specified by espn.com were 9/2 for Germany, 5/1 for Brazil, 11/2 for France, 20/1 for England, and 7/1 for Spain. Find the corresponding prior probabilities of winning for these five teams.David Barnes and his fiancée Valerie Shah are visiting Hawaii. At the Hawaiian Cultural Center in Honolulu, they are told that 2 out of a group of 8 people will be randomly picked for a free lesson of a Tahitian dance a. What is the probability that both David and Valerie get picked for the Tahitian dance lesson? (round 4 decimal places) b. What is the probability that Valerie gets picked before David for the Tahitian dance lesson? (round 4 decimal places)