Question: Consider a a two state model. Suppose that there are two consumers, A and B, with endowments of WA 2 (6,4) and WE = (8,

Consider a a two state model. Suppose that there are two consumers, A and B, with endowments of WA 2 (6,4) and WE = (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(c1) + (1 7r)u(c2) with u'(-) > O, and u\"(-)

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