In the trade-off method for assessing utilities, consider the dollar amount X1 that makes you indifferent between
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In the trade-off method for assessing utilities, consider the dollar amount X1 that makes you indifferent between gambles A1 and A2, and X2 that makes you indifferent between gambles B1 and B2. Show that U(X2) = 2U(X1).
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We wish to show that EU 2 2EU 1 when you are indifferent between 1 and 2 and you ...View the full answer
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