I am confused by something regarding expected utility calculation.
When we are calculating the expected utility where 2 positive outcomes can happen at the same time such as the example below:
We win 50 with probability of 0.3
We win 100 with probability of 0.2
How do we calculate the expected utility? Which of the options below is correct?
(1)$50 times 0.3 + 100 times 0.2 = 35$
(2)$50 times 0.3 + 100 times 0.2 + 150 times (0.3 times 0.2) = 44$
