On the Positive Expected Utility of Combination Wagers

Babatunde Buraimo
Corresponding Author
Babatunde Buraimo
[email protected].
Management School, University of Liverpool, Liverpool L69 7ZH, United Kingdom
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,
David Peel
David Peel
[email protected]
Management School, Lancaster University, Lancaster LA1 4YX, United Kingdom
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,
Rob Simmons
Rob Simmons
[email protected]
Management School, Lancaster University, Lancaster LA1 4YX, United Kingdom
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Babatunde Buraimo

Corresponding Author

Babatunde Buraimo

[email protected].

Management School, University of Liverpool, Liverpool L69 7ZH, United Kingdom

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David Peel

[email protected]

Management School, Lancaster University, Lancaster LA1 4YX, United Kingdom

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Rob Simmons

[email protected]

Management School, Lancaster University, Lancaster LA1 4YX, United Kingdom

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Published Online:18 Aug 2016https://doi.org/10.1287/deca.2016.0334

Abstract

We demonstrate that a utility maximizing individual with an everywhere concave utility function may optimally wager on two or more outcomes in an event even though the expected returns to a unit stake are negative on all outcomes except one.

Volume 13, Issue 3

September 2016

Pages 173-221

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Received:June 14, 2016
Accepted:June 29, 2016
Published Online:August 18, 2016

Cite as

Babatunde Buraimo, David Peel, Rob Simmons (2016) On the Positive Expected Utility of Combination Wagers. Decision Analysis 13(3):209-212.

https://doi.org/10.1287/deca.2016.0334

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On the Positive Expected Utility of Combination Wagers

Abstract

Volume 13, Issue 3

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