Economics Asked by Teko JR on April 21, 2021
Can somebody explain to me if that it’s true and also graphically explain it?
This is trivially not true. Consider simple example of utility:
$$u(x) = x^{1/2}$$
Expected utility $E(u(x)) = E[x^{1/2}]$
Inverse utility is $u^{-1} implies x = u^2 $
clearly generally $E(u) neq u^{-1} $.
Answered by 1muflon1 on April 21, 2021
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