According to prospect theory, people are very averse to small risks. How is this captured on a

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According to prospect theory, people are very averse to small risks. How is this captured on a utility function? How is this different from the standard theory about choice under uncertainty discussed in Chapter 4?

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Intermediate Microeconomics and Its Application

ISBN: 978-1133189039

12th edition

Authors: Walter Nicholson, Christopher M. Snyder

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Question Posted: Oct 07, 2016 11:58 AM

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According to prospect theory, people are very averse to small risks. How is this captured on a

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As per the prospect theory individuals are risk averse to small gambles In the prospect theory the r...View the full answer

Intermediate Microeconomics and Its Application

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