         PERSONAL UTILITY FUNCTION                                              
                                                                                
UTILITY THEORY HAS TO DO WITH ONE'S PREFERENCE FOR VARIOUS                      
DECISION ALTERNATIVES. SUPPOSE EVERY DECISION ONE CAN MAKE                      
LEADS TO A KNOWN MONETARY PAYOFF. THEN THAT PERSON WILL                         
CHOOSE THE DECISION WITH THE HIGHEST PAYOFF. HOWEVER, IF THERE                  
IS SOME UNCERTAINTY IN THE RESULT OF A DECISION THE CORRECT                     
DECISION IS NOT SO OBVIOUS. UTILITY THEORY PERMITS US TO                        
ASSIGN A NUMBER TO EACH PAYOFF, ITS 'UTILITY'. HIGHER PAYOFFS                   
LEAD TO HIGHER UTILITIES BUT A UTILITY OF 2  FOR $5000 DOES                     
DOES NOT NECESSARILY MEAN A UTILITY OF 4 FOR $10000. ONCE                       
UTILITIES ARE DETERMINED DECISIONS ARE MADE BASED UPON HIGHEST                  
EXPECTED UTILITY.                                                               
                                                                                
PRESS ENTER TO CONTINUE?                                                        
UTILITIES ARE DETERMINED IN THE FOLLOWING WAY: THE POSSIBLE                     
PAYOFFS ARE RANKED FROM HIGHEST TO LOWEST. THE HIGHEST PAYOFF                   
IS ASSIGNED SOME ARBITRARY UTILITY, SAY 1. THE LOWEST PAYOFF                    
IS ASSIGNED SOME LOWER ARBITRARY UTILITY, SAY 0. WE DETERMINE                   
THE UTILITIES OF THE OTHER PAYOFFS BY SETTING UP A GAMBLE                       
WE ARE GIVEN THE CHOICE OF HAVING THIS PAYOFF FOR SURE OR OF                    
GETTING THE HIGHEST PAYOFF WITH PROBABILITY P AND THE LOWEST                    
WITH PROBABILITY 1-P. WITH P BEING DETERMINED THE UTILITY OF                    
THIS MIDDLE PAYOFF IS COMPUTED. AS THE PAYOFFS GO UP SO MUST P.                 
WE LOOK FOR THE P SO THAT WE ARE INDIFFERENT BETWEEN THE SURE                   
THING AND THE GAMBLE. UTILITY THEORY SAYS THERE IS SUCH A P.                    
                                                                                
PRESS ENTER TO CONTINUE?                                                        
FOR EXAMPLE IF THE LOWEST PAYOFF WAS $0 AND THE HIGHEST WAS                     
$100000 THEN FOR AN INTERMEDIATE PAYOFF OF $50000 WE WOULD ASK                  
WOULD WE PREFER $50000 FOR SURE OR $100000 WITH PROBABILITY P                   
AND $0 WITH PROBABILITY 1-P. KEEP ADJUSTING P UNTIL WE ARE                      
INDIFFERENT TO THE SURE THING AND THE BET. THIS IS P.                           
                                                                                
DIFFERENT PEOPLE HAVE DIFFERENT UTILITY FUNCTIONS. THUS UNDER                   
IDENTICAL CIRCUMSTANCES DIFFERENT PEOPLE MAY MAKE DIFFERENT                     
DECISIONS AND BOTH STILL MAXIMIZE EXPECTED UTILITY. THE                         
PROGRAM WILL ASSIGN UTILITIES TO DOLLAR AMOUNTS BETWEEN                         
$0 AND $100000 WITH THE UTILITY OF $0 BEING SET TO 0 AND THAT                   
OF $100000 BEING SET TO 10.                                                     
                                                                                
PRESS ENTER TO BEGIN?                                                           
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 100 FOR                   
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO 0                             
                                                                                
ENTER THE PROBABILITY? 0.1                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 1000 FOR                  
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .1                            
                                                                                
ENTER THE PROBABILITY? 0.2                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 3000 FOR                  
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .2                            
                                                                                
ENTER THE PROBABILITY? 0.3                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 5000 FOR                  
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .3                            
                                                                                
ENTER THE PROBABILITY? 0.4                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 10000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .4                            
                                                                                
ENTER THE PROBABILITY? 0.5                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 20000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .5                            
                                                                                
ENTER THE PROBABILITY? 0.6                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 30000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .6                            
                                                                                
ENTER THE PROBABILITY? 0.7                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 40000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .7                            
                                                                                
ENTER THE PROBABILITY? 0.8                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 50000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .8                            
                                                                                
ENTER THE PROBABILITY? 0.9                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 60000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO .9                            
                                                                                
ENTER THE PROBABILITY? 1.0                                                      
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 70000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO 1                             
                                                                                
ENTER THE PROBABILITY?                                                          
                                                                                
PROBABILITY MUST BE BETWEEN 60000 AND 100000                                    
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 70000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO 1                             
                                                                                
ENTER THE PROBABILITY? 1                                                        
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 80000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO 1                             
                                                                                
ENTER THE PROBABILITY? 1                                                        
                                                                                
WITH WHAT PROBAILITY(P) WOULD YOU BE INDIFFERENT TO $ 90000 FOR                 
SURE OR $ 100000 WITH PROBABILITY P AND 0 WITH PROBABILITY                      
1 - P. THIS PROBABILITY MUST BE AT LEAST EQUAL TO 1                             
                                                                                
ENTER THE PROBABILITY? 1                                                        
IS PRINTED OUTPUT DESIRED(Y/N)? Y                                               
  PAYOFF        UTILITY                                                         
       0           0.00                                                         
     100           1.00                                                         
    1000           2.00                                                         
    3000           3.00                                                         
    5000           4.00                                                         
   10000           5.00                                                         
   20000           6.00                                                         
   30000           7.00                                                         
   40000           8.00                                                         
   50000           9.00                                                         
                                                                                
PRESS ENTER TO CONTINUE?                                                        
  PAYOFF        UTILITY                                                         
   60000          10.00                                                         
   70000          10.00                                                         
   80000          10.00                                                         
   90000          10.00                                                         
  100000          10.00                                                         
