Question
Consider an individual with Bernoulli utility u(x) = sqrt(x). This individual faces a risky project that is modeled as a lottery that pays 81 or
Consider an individual with Bernoulli utility u(x) = sqrt(x). This individual faces a risky project that is modeled as a lottery that pays 81 or 25 with equal probability. Calculate the true equivalent of the lottery and compare it with the expectation of the lottery.
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More Calculus Of A Single Variable
Authors: Peter R Mercer
1st Edition
1493919261, 9781493919260
