Dastidar, Krishnendu Ghosh - Institute of Social and Economic Research (ISER), Osaka … - 2010
We consider a two good world where an individual i with income mi has utility function u(x,y), where x belongs to [0,infinity) and y belongs {0,1}. We first derive the valuation (maximum price that he is willing to pay for the object) for good y as a function of his income. Then we consider the...