Question: Say Peter has the utility function . Peter has a job with a fixed wage of 150 euros. Say the landlord in question three is

Say Peter has the utility function . Peter has a job with a fixed wage of 150 euros.

Say the landlord in question three is risk neutral and for the tenant. Say the good and bad outputs are 350 and 250 respectively (that is output before rent is paid). What share of output would the tenant need to pay the landlord such that the landlord would be no worse off than by offering the tenant a fixed rent contract. Would the tenant prefer the share contract?

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