Question: Consider a a two state model. Consider a a two state model. Suppose that there are two consumers, A and B, with endowments of (M4

Consider a a two state model.

Consider a a two state model. Suppose that there are two consumers, A and B, with endowments of (M4 = (6, 4) and w3 = (8, 6). Let the objective probability of state 1 occuring be 7r. Suppose that both consumers are expected utility maximizers and strictly risk averse and that they have identical preferences 7ru(cl) + (1 7r)u(02) with u'(-) > O, and u\"(-)

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