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On the Positive Expected Utility of Combination Wagers

Author

Listed:
  • Babatunde Buraimo

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

  • David Peel

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

  • Rob Simmons

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

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.

Suggested Citation

  • Babatunde Buraimo & David Peel & Rob Simmons, 2016. "On the Positive Expected Utility of Combination Wagers," Decision Analysis, INFORMS, vol. 13(3), pages 209-212, September.
    • Handle: RePEc:inm:ordeca:v:13:y:2016:i:3:p:209-212
    DOI: 10.1287/deca.2016.0334
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