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Let ug(x)u_{g}(x) Be Julie's Utility Function Over Gains And ul(x)u_{l}(x) Her Utility Function Over Losses

Question 5

Multiple Choice

Let ug(x) u_{g}(x) be Julie's utility function over gains and ul(x) u_{l}(x) her utility function over losses. If Julie's preferences are best described with Prospect Theory, which of the following is an example of Julie's value function?


A) v(x0) ={ln(x) ,x>00,x=0x,x<0\quad v(x \mid 0) = \begin{cases}\ln (x) , & x>0 \\ 0, & x=0 \\ -x, & x<0\end{cases}
B) v(x0) ={X,x>00,x=0ln(x) ,x<0\quad v(x \mid 0) = \begin{cases}\mathrm{X}, & x>0 \\ 0, & x=0 \\ -\ln (-x) , & x<0\end{cases}
C) v(x0) ={x,x>0x,x=0x,x<0\quad v(x \mid 0) =\left\{\begin{array}{l}x, x>0 \\ x, x=0 \\ x, x<0\end{array}\right.
D) (x0) ={ln(x) ,x>0(x2) ,x0\quad(x \mid 0) =\left\{\begin{array}{c}\ln (x) , x>0 \\ -\left(x^{2}\right) , \quad x \leq 0\end{array}\right.

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