What types of utility curves (increasing, decreasing, or constant marginal utility of wealth) are generally associated with each of the following attitudes toward risk:
(b) risk-neutral, and
a) risk averse = decreasing
b) risk neutral = constant
c) risk loving = increasing
Think of this example, you are given the chance to enter a bid, where you have 50% chance of getting $1mil, and 50% chance of getting nothing. Alternatively, you ...
The types of utility Curves associated with risk in marginal utility of wealth are examined.