how how to construct the reference dependent utility function for two friends Kate and Mary whose gains and losses are listed as follows : Kate's net worth is $ 4.5 million ( decreased from $ 5.5 to $ 4.5 million ) Mary's net worth $ 3.2 million ( increased from $ 3 to $ 3.2 million ) ( First determine the reference point ( use a parameter ) and then derive reference utility function for
how how to construct the reference dependent utility function for two friends Kate and Mary whose gains and losses are listed as follows : Kate's net worth is $ 4.5 million ( decreased from $ 5.5 to $ 4.5 million ) Mary's net worth $ 3.2 million ( increased from $ 3 to $ 3.2 million ) ( First determine the reference point ( use a parameter ) and then derive reference utility function for
Chapter4: Utility Maximization And Choice
Section: Chapter Questions
Problem 4.12P
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4. Show how to construct the reference dependent utility function for two friends Kate and Mary whose gains and losses are listed as follows :
Kate's net worth is $ 4.5 million ( decreased from $ 5.5 to $ 4.5 million )
Mary's net worth $ 3.2 million ( increased from $ 3 to $ 3.2 million )
( First determine the reference point ( use a parameter ) and then derive reference utility function for each ) .
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ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning