Comparative Utility

Example in Practice

Laptop A: $1200, P(A good) = 90%
Laptop B: $1000, P(B good) = 70%
Utility: Good PC = +100, Problematic PC = -50

Normalizing the prices,
Net Utility A = 0.9×100 + 0.1×(-50) – 100 = 90 – 5 – 100 = -15
Net Utility B = 0.7×100 + 0.3×(-50) – 83.33 = 70 – 15 – 83.33 = -28.33

Result: Buy Laptop A (-15 vs. -28.33).