A sure loss compared to what? Not taking the bet has a utility too.
A bet that loses 1 util on heads and 2 on tails compared to the status quo would have utilities like:
u(heads) = −1
u(tails) = −2
u(status quo) = 0
Add a constant to all these and the status quo will still be higher.
Correct, my mistake.
A sure loss compared to what? Not taking the bet has a utility too.
A bet that loses 1 util on heads and 2 on tails compared to the status quo would have utilities like:
u(heads) = −1
u(tails) = −2
u(status quo) = 0
Add a constant to all these and the status quo will still be higher.
Correct, my mistake.