Explain why the indifference curves in a probability triangle diagram are straight lines if preferences satisfy expected

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Explain why the indifference curves in a probability triangle diagram are straight lines if preferences satisfy expected utility theory. [Hint:

we can write the expected utility of a prospect as U(x) = p1u(x1) + (1

− p2 − p3) u(x2) + p3u(x3).]

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Behavioral Economics

ISBN: 9780415737616

2nd Edition

Authors: Edward Cartwright

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Question Posted: Nov 12, 2024 02:00 AM

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Explain why the indifference curves in a probability triangle diagram are straight lines if preferences satisfy expected

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Behavioral Economics

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