Someone who values a lottery at more than the expected value is
A)a risk lover
B)risk neutral
C)risk averse
D)one who tends to play lots of lotteries

Question

​Someone who values a lottery at more than the expected value is
A)​a risk lover
B)risk neutral
C)risk averse
D)​one who tends to play lots of lotteries

Quizplus · Accepted Answer

A person who values a lottery at more than its expected value is someone who is willing to take a risk in the hopes of making a large gain. This is the definition of a risk lover. A risk neutral person would place no value on the lottery other than its expected value, and a risk averse person would value the lottery less than its expected value, as they are not willing to take the risk for a potentially large payoff. The answer D is not relevant to the question as it does not describe the attitude towards the lottery, but rather the behavior of playing multiple lotteries.

​Someone Who Values a Lottery at More Than the Expected

Someone Who Values a Lottery at More Than the Expected