Question: Consider the following decision table under risk, in which the consequences are monetary payoffs. Convert this problem into one of choosing between lotteries (ai). The

Consider the following decision table under risk, in which the consequences are monetary payoffs.

Convert this problem into one of choosing between lotteries (ai). The decision maker holds the following indifferences with reference lotteries:
$100 ~ $120 (0.5) $90 (0.5)
$110 ~ $120 (0.8) $90 (0.2)
Which action should the decision maker choose?

States Consequences $120 $120 $110 $100 $90 $100 Actions $100 $100 $110 Probability 1/2 1/4 1/4

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