How to find the expected utility of profit under each alternative crop Table 1. Annual Returns to

How to find the expected utility of profit under each alternative crop

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Table 1. Annual Returns to Cropping Alternatives ($ profit / acre) Outcome Worst Bad OK Good Great Probability 0.1 0.2 0.4 0.2 0.1 3 Cotton 200 300 400 500 600 Alfalfa 100 250 400 550 700 Durum 0 200 400 600 800 Assume that Wile E. Coyote has a power utility function with a coefficient of risk aversion of 0.4, so he is only moderately risk averse. Table 1. Annual Returns to Cropping Alternatives ($ profit / acre) Outcome Worst Bad OK Good Great Probability 0.1 0.2 0.4 0.2 0.1 3 Cotton 200 300 400 500 600 Alfalfa 100 250 400 550 700 Durum 0 200 400 600 800 Assume that Wile E. Coyote has a power utility function with a coefficient of risk aversion of 0.4, so he is only moderately risk averse.