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Tagged with expected-utility proof
5 questions
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Lucas 1972 Neutrality of Money Proof of derivation
Lucas (1972) Neutrality of Money section 3 has following set up.
$U(c,n)$ is Utility function of consumption and labor (or producing labor output). $U_c (c,n) >0$ and $U_n (c,n)<0$. Further, the ...
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Proof of the Lucas' Cost of Business Cycles
I am trying to derive the parameter used by Lucas to measure the cost of business cycles, namely:
derived in the paper "Macroeconomic Priorities".
I already searched in several papers but I ...
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Existence of best and worst lotteries with finite outcome set and IIA
In the context of expected utility theory, I want to prove that if the set of outcomes is finite and an agent has a rational preference relation over the set of lotteries, and if that preference ...
- 63
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Expected Utility with expected value and variance
I'm having trouble with a question from Ariel Rubinstein's book, Lecture Notes in Microeconomic Theory. It's the problem 2 from Problem Set 7. Here's the question:
Show that the utility function $u(...
- 353
2
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Proof of Expected utility theorem with three outcomes
I am trying to prove the expected utility theorem with three outcomes. The expected utility with $n$ outcomes is rather cumbersome and long in the economics textbook Mas-Colell. But I was hoping that ...
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