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Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility
Suppose now that this is a relatively big project for Chang. Therefore, she decides to use expected utility as her criterion, with an exponential utility function. Using some trial and error, see which risk tolerance changes her initial decision from go ahead to abandon whenp150.4,p250.8, andp350.1.
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