CRRA_Lottery_Calculator.xlsx

	A	B	C	D	E
1	CRRA Lottery Calculator (up to 3 outcomes)
2
3	Inputs (yellow)			Outputs (green)
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5	Outcome	Amount (x)	Probability (p)	Metric	Value

6	1	$10.00	50.0%	Expected value (EV)	$5.50
7	2	$1.00	50.0%	Expected utility (EU)	1.151293
8	3	$1.00	0.0%	Certainty equivalent (CE)	$3.16
9	Expected amount	$5.50		Risk premium (EV − CE)	$2.34
10	Eta (η): relative risk aversion	1.0			57.50%
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12	Sum of probabilities	1.000
13	Check (should be 1)	OK
14	Tip:	Set unused outcomes' probability to 0.
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16	Utility definition used
17	If η ≠ 1: u(x) = x^(1−η) / (1−η)
18	If η = 1: u(x) = ln(x)
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