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2. Consider an agent who uses the Loss Aversion Model of Kahneman and Tversky in her evaluations of bundles consisting of book (B) and money

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2. Consider an agent who uses the Loss Aversion Model of Kahneman and Tversky in her evaluations of bundles consisting of book (B) and money (M). Her utility for consuming bundle (CB,cM) when her reference is {r3,rM) is UEril-MJIEB?CM) = \".3033 TB) + 2vM(CM TM) where 113(3): 2.7: for .1: 2 0; U3{$j = 3:3 for .7:

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