If Paul is risk loving and his basketball team has a probability of .5 of winning, then Paul would rather bet $10 on his team than $100.(When Paul bets X, he wins X if his team wins and loses X if his team loses.)

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As a risk-loving individual, Paul would prefer to bet a larger amount ($100) rather than a smaller amount ($10) because he derives more utility from the potential higher payoff associated with the greater risk.

If Paul Is Risk Loving and His Basketball Team Has