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4. Consider Jian Huan (JH) and Juan Camilo (JC) who are loss averse with value function v(x). JH is an optimist and believes that
4. Consider Jian Huan (JH) and Juan Camilo (JC) who are loss averse with value function v(x). JH is an optimist and believes that he will receive a raise of 6,400. JC is a pessimist and believes he won't receive a raise. In fact, at the end of the year, both receive a raise of 5,000. Assume both have the following value function: v(x) a for gains (0) 2x for losses ( 5000, given that the value function will change based on these situations. If you are going to check for individual values of b, you can focus on the range from 0 to 10,000, in multiples of 500. If you are using a calculator like Desmos.com, you can plot a function for a specific range (for example b < 5000) by adding the following after your equation: "{
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Step: 1
a To determine who is happier we need to compare their expectations about the raise b with the actual raise of 5000 JH being an optimist expects a rai...Get Instant Access to Expert-Tailored Solutions
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Step: 2
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