21011ps05 - candy outright to either Anjie or Benjie Does...

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Econ 210A Fall 2011 Assignment #5 Due date: Monday, November 14 1. Mom has only one (indivisible) piece of candy and has to decide whether to give it to her daughter Angie or to her son Benjie. Like all impartial moms she is indi/erent between giving it to Anjie outright (that is, with probability 1) and giving it to Benjie outright. She prefers, however, tossing a fair coin and giving the candy to Anjie if it comes up heads and giving the candy to Benjie if the coin comes up tails, to giving the
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Unformatted text preview: candy outright to either Anjie or Benjie. Does this description of Mom&s preferences conform to the expected utility model? 2. Ex. 11.4, p. 194 in Varian [Note typo in second sentence: Instead of "marginal utility is decreasing," it should be "utility is decreasing."] 3. Ex. 6.C.13, p. 211 in MWG. 4. Ex. 11.5, p. 195 in Varian 5. Ex. 11.9, p. 196 in Varian 6. Ex. 11.10, p. 196 in Varian 1...
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