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IVERSITY Consider an economy with two agents where agents A and B both have the same risk attitude given by v(x) = Inx . Suppose

IVERSITY Consider an economy with two agents where agents A and B both have the same risk attitude given by v(x) = Inx . Suppose in state 1, only agent A has a job that earns 3 and B does not earn anything. In state 2, only B works and earns 2. Solve for the equilibrium in this economy when mutual insurance is feasible. Assume both states are equally likely. Maximum size for new files: 100MB, maximum attachments: 1

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