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. 2013 Oct 6;10(87):20130469. doi: 10.1098/rsif.2013.0469

Figure 3.

Figure 3.

The certainty equivalent C(X) of a lottery X is the certain wealth amount such that its utility is equal to the expected utility of the lottery X. Illustrated here is the certainty equivalent of the lottery X that pays a with probability 1/2 and b with probability 1/2.