of the probabilities Note that for these first order conditions to make sense u()must be concave n particular, if the ratio of the probabilities equals the ratio of the prices-this would be true if all bets were fair- consumption levels are equal across states But more generally- economics tells you to equalize marginal utilities of consumption not total utilitiesof the probabilities. Note that for these first order conditions to make sense u. must be concave. In particular, if the ratio of the probabilities equals the ratio of the prices– this would be true if all bets were fair– consumption levels are equal across states. But more generally– economics tells you to equalize marginal utilities of consumption not total utilities