Malee, who is risk averse, has two pieces of jewelry, each worth $ 1,000. She plans to

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Malee, who is risk averse, has two pieces of jewelry, each worth $ 1,000. She plans to send them to her sister’s firm in Thailand to be sold there. She is concerned about the safety of shipping them. She believes that the probability that any box shipped will not reach its destination is θ. Is her expected utility higher if she sends the articles together or in two separate shipments?

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Managerial Economics and Strategy

ISBN: 978-0321566447

1st edition

Authors: Jeffrey M. Perloff, James A. Brander

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