Question: Suppose a consumer 's preference relation over gambles satises both the substitution and re- duction to simple gambles axioms (a) Show that the independence axiom

Suppose a consumer's preference relation over

gambles satises both the substitution and re-

duction to simple gambles axioms

(a) Show that the independence axiom also holds.

(b) For two gambles, given the independence ax-

iom holds show that if g g ' and (0,1)

then g g + (1 - ) g' g '

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