- #1

Felice

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## Homework Statement

I have a financial intermediation model with delegated monitoring to a venture capitalist. At the moment all participants are risk neutral and i want to introduce risk aversion to the model. Therefore i need a utility function under the von neumann morgenstern criteria, ie. concavity and continous

v= future project realisation

B= private benefits

ph=probability for high effort

pl=probability for low effort

## Homework Equations

incentive constraint of the entrepreneur : ph times v >= pl times v + B

## The Attempt at a Solution

For risk aversion i need to introduce here utility function in a specific form, but i am not sure which to take