Question: Suppose 0=(0,..., 6,)' is unknown, and a = (a,,..., a,)' has utility g(0- a, Y), where all second partial derivatives of g exist and Y
Suppose 0=(0,..., 6,)' is unknown, and a = (a,,..., a,)' has utility g(0-
a, Y), where all second partial derivatives of g exist and Y is an unknown random variable. For a close to 0, heuristically show that the implied loss for decision making can be considered to be a shifted quadratic loss of the form L(0,
a) (0-a+c)'Q(0-a+c).
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