Question: 5. This problem studies an experimental subject with reference-dependent preferences over mugs and wealth. Their consumption of mugs is denoted m and his wealth is

5. This problem studies an experimental subject with reference-dependent preferences over mugs and wealth. Their consumption of mugs is denoted m and his wealth is denoted w. Let the reference points (endowments) be denoted m* and w*. Their value function is: z ifz>0 V _ *: _ *:4 _ *"l"' _ *' h (mm"ww") =4v(m m*) + v(w w*), where v(z) {2$ 2

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