Let L be a lottery that provides a 1/4 chance of winning a car and a 3/4 chance of winning nothing. Also, assume that a bike is a separate possible prize. And assume the following: u(bike) =...

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Extracted text: Let L be a lottery that provides a 1/4 chance of winning a car and a 3/4 chance of winning nothing. Also, assume that a bike is a separate possible prize. And assume the following: u(bike) = u(nothing) + a u(car) = u(bike) + y x >0 y > 0 Suppose that Ann prefers L to the bike. What constraint concerning x and y (in addition to the constraints just stated) implies utility assignments for the three prizes (nothing, bike, and car) that make the principle of maximizing expected utility agree with Ann's preference? y < 3x="" o="" y=""> 3x y > 2x y > x y = 0, x = 0 Any value of a and y are consistent with expected utility theory. No values of æ and y are consistent with expected utility theory.