Of course you are right, silly mistake.
(Not really important nitpick:) The dollar is spent once the ticket is bought and doesn’t return even if you win, so you shoudn’t have there (1-p(win)) * U(-$1), but just U(-$1).
Of course you are right, silly mistake.
(Not really important nitpick:) The dollar is spent once the ticket is bought and doesn’t return even if you win, so you shoudn’t have there (1-p(win)) * U(-$1), but just U(-$1).