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Team X often play their last regular basketball game against

Paper help Economics Team X often play their last regular basketball game against

Economics

Team X often play their last regular basketball game against

Team X often play their last regular basketball game against University Y. Suppose: i) the odds are… Show more Team X often play their last regular basketball game against University Y. Suppose: i) the odds are estimated as 1/3-2/3 in favor of Y; ii) a Team X fan has $1000, his utility of income is u(x) = x^1/2; and iii) a team Y fan offers him a $B = $300 betting game: He loses $300 (i.e., the team Y fan wins $300) if team Y wins; and he wins $600 (i.e., the team Y fan loses $600) if Team X wins. (a) What is the Team X Fan expected income ? (b) What is his expected utility? (c) Advise him if he should place the bet, and give a brief explanation. • Show less

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