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For example, the function is given by $-a(y_0)^{-b} - cy_1^{-d}$. What restrictions on the parameters are needed to normalize this?

To my knowledge, the von Neumann-Morgernstern function is the summation of the probabilities and the felicity function.

So summation of the probabilities must be 1, does this imply $-a - b = 1$? Also how do I normalize the other part? I think that using $\mathrm e^{-b \log y_0}$ might work. Can someone tell me if this is right?

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What is felicity function? Do you mean utility function? –  Srivatsan Dec 4 '11 at 23:26

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