Quiz 4 For this problem, assume that utility values are constrained to the interval [0,1], as discussed in class. The table below shows payoffs corresponding to a decision problem with two decisions (D1, D2) and two states of nature (S1, S2). If a decision maker who assigns a utility of 0.5 to the $500 payoff is indifferent between D1 and D2, answer the following questions: a) What is the utility range (min, max) that a risk-averse decision maker would assign to the $500 payoff? b) What is the utility range (min, max) for the $500 payoff under which a risk-averse decision maker would choose D2? c) What is the utility range (min, max) for the $500 payoff under which a risk-seeking decision maker would choose D2? d) What decision would a risk-neutral individual make? Why? e) What is the EVPI for a risk-neutral decision-maker? S1 S2 D1 1000 -1000 D2 500 1000