Hirshleifer-Yaari diagram
This app illustrates expected utility with binary lotteries
You can:
- visualize the shape of the indifference curves in the Hirshleifer-Yaari diagram
- and the insurance choice of the individual
- to choose the characteristics of the lottery: probability, size of the loss
- to choose the utility function: CRRA or CARA
- to choose the utility function parameter
- to choose the price of insurance
Hirshleifer-Yaari diagram