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Unformatted text preview: L ( Z ) , For what pairs p , q L ( Z ) is p % q For all % in the set? In the problem set you will discuss another example oF this kind oF question. Risk Aversion We say that % is risk averse iF For any lottery p , [ Ep ] % p . We will see now that For a decision maker with preFerences % obey-ing the vNM axioms, risk aversion is closely related to the concavity oF the vNM utility Function representing % ....
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- Fall '10