Show that your utility function of wealth is concave

Reference no: EM132197898

Question: In an experiment where a fair coin was flipped and you got paid $2,000 if heads and $0 if tails. I is agreed that you would pay $500 for this game. This means you have a tendency to pay less than the expectation of the game. Show that your utility function of wealth is concave. (Hint: Look up Jensen's inequality).

Reference no: EM132197898

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