The fact that so many people enter sweepstakes and/or buy lottery tickets demonstrates the difference between:
A)the expected value and the expected utility criteria.
B)altruism and selfishness.
C)risk aversion and risk indifference.
D)certainty and uncertainty.

Question

Quizplus · Accepted Answer

The expected value criterion suggests that an individual should take an action if the expected monetary value of that action is positive. The expected utility criterion, on the other hand, considers the individual's subjective preferences and values. In the case of sweepstakes and lotteries, the expected monetary value is typically negative, but individuals may still choose to participate due to the possibility of a large payout (i.e. expected utility). Therefore, this demonstrates the difference between expected value and expected utility criteria.

The Fact That So Many People Enter Sweepstakes And/or Buy