ECO227: Experimental Economics and Finance Tutorial 3
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ECO227: Experimental Economics and Finance
Tutorial 3
Question A
Figure 1 is a utility function u(. ) based on the expected utility theory.
a. What can you infer from the graph?
b. Please draw a graph to show the utility function for a risk-seeking individual. Explain your answer.
c. Please draw a graph to show the utility function for a risk-neutral individual. Explain your answer.
Figure 1
Question B
What is the certainty effect? Please explain your answer with an example.
Question C
What is the reflection effect? Please explain your answer with an example.
2022-12-17