Recent content by dazm

Hm, alright, well I rephrased the question a bit. The actual question was There are two groups of equal size, each with a utility function given by U(M) = M^1/2 where M = 100 is the initial wealth level for every individual. Each member of group 1 faces a loss of 36 with probability 0.5. Each...

Homework Statement There are two groups, group 1 and 2. Group 1 has a 0.5 chance of losing $36, while group 2 has a 0.1 chance of losing $36 dollars. The groups are of equal size. Now an insurance company is willing to cover the losses for a payment. However, the insurance company has an...