Suppose there are two jars. In Jar $1 \mathrm{I}$ know that there are 10 white balls and either 5 or 20 black balls. In Jar 2 I know that there are 10 red balls and either 10 or 30 black balls. I receive $\$ 5$ if a white ball is drawn from jar 1 and $\$ 10$ if a red ball is drawn from jar 2 and 0 otherwise.
a. Suppose that I am risk-neutral. Using maxmin expected utility theory, do I draw from jar 1 or jar 2 and what is the value of my maxmin expected utility?
b. Now suppose I am risk-averse, with a utility function given by $U(x)=\ln (x)$. Do I choose Jar 1 or Jar 2 ?

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The Answer of Suppose there are two jars. In Jar $1 \mathrm{I}$ know that there are 10 white balls and either 5 or 20 black balls. In Jar 2 I know that there are 10 red balls and either 10 or 30 black balls. I receive $\$ 5$ if a white ball is drawn from jar 1 and $\$ 10$ if a red ball is drawn from jar 2 and 0 otherwise.
a. Suppose that I am risk-neutral. Using maxmin expected utility theory, do I draw from jar 1 or jar 2 and what is the value of my maxmin expected utility?
b. Now suppose I am risk-averse, with a utility function given by $U(x)=\ln (x)$. Do I choose Jar 1 or Jar 2 ?

Suppose There Are Two Jars 1I1 \mathrm{I}1I Know That There Are 10 White Balls and Either 5

Suppose There Are Two Jars $1 \mathrm{I}$ Know That There Are 10 White Balls and Either 5