2. (3+6+2 points) Expected utility theory You are risk neutral with [U(x) = x], and care...

 

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2. (3+6+2 points) Expected utility theory You are risk neutral with [U(x) = x], and care only about your income in the current period. With probability p, you will catch a disease that reduces your income from y, its level when you are healthy, to y - k, where k > 0. A vaccine is available, at cost c, that reduces the probability of your catching the disease from p to q 2. (3+6+2 points) Expected utility theory You are risk neutral with [U(x) = x], and care only about your income in the current period. With probability p, you will catch a disease that reduces your income from y, its level when you are healthy, to y - k, where k > 0. A vaccine is available, at cost c, that reduces the probability of your catching the disease from p to q

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Expected Utility Theory and Vaccination Decisions a Vaccination Decision Condition As a riskneutral individual with utility Ux x income directly trans... View the full answer