Past exam of the MSc in advanced computer science course of the University of Oxford / 2023 / Computational game theory / 1 / a

Under the expected utility hypothesis, use positive affine uniqueness of affine preference representations to normalize the extreme outcomes to $u({\omega }_1)=1$ and $u({\omega }_4)=0$. The stated indifference relations then giveThe two lotteries have expected utilitiesHence ${\ell }_2\succ {\ell }_1$, with normalized expected utility difference $3/100$. Equivalently, substitution reduces them to lotteries with probabilities $0.45$ and $0.48$ of the better extreme outcome. The inference uses the independence axiom for lottery preferences; the three displayed outcome comparisons alone would not determine preferences over all compound lotteries without the expected utility hypothesis.