the allais paradox suppose we are offered a choice between the following two lotter 672726

(The Allais Paradox) Suppose we are offered a choice between the following two lotteries:

L₁:	With probability 1, we receive $1 million.
L₂:	With probability .10, we receive $5 million.
	With probability .89, we receive $1 million.
	With probability .01, we receive $0.

Which lottery do we prefer? Now consider the following two lotteries:

L₃:	With probability .11, we receive $1 million.
	With probability .89, we receive $0.
L₄:	With probability .10, we receive $5 million.
	With probability .90, we receive $0.

Which lottery do we prefer? Suppose (like most people), we prefer L₁ to L₂. Show that L₃ must have a larger expected utility than L₄.