Risk Premium and Certainty Equivalent

The utility function U(w) = √w is concave, so the consumer is risk averse. A lottery pays wL = 16 or wH = 100. Drag the slider to change the probability p of the good outcome and see how the risk premium (the gap between expected value and certainty equivalent) changes.

Probability (p)
0.50
Expected value
58.00
Expected utility
7.00
Certainty equiv.
49.00
Risk premium
9.00