Question: A bettor with utility function u(x) = ln(x), where x is total wealth, has a choice between the following two alternatives: Win $10,000 with probability

A bettor with utility function u(x) = ln(x), where x is

A bettor with utility function u(x) = ln(x), where x is total wealth, has a choice between the following two alternatives: Win $10,000 with probability 0.2 Win $1000 with probability 0.8 Win $3000 with probability 0.9 Win $2000 with probability 0.1 If the bettor currently has $2500, should he choose A or B? Repeat i), assuming the bettor has $5000. Repeat i), assuming the bettor has $10,000. Do you think that this pattern of choices between A and B is reasonable? Why or why not

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