Lesson 26 : Maximizing a utility function

This lesson must be completed in three steps : 1) watch the video-lecture, 2) try to do the exercise on your own, 3) watch the detailed answer.

1) Theory and numeric example
                                           video(3 min)
2) Modify the model in GAMS on your own
    • open GAMS
    • run the model primal0_risk_base.gms
    • modify the model on your own by introducing a utility function as follows U(Y)=[1/(1-r)].Z1-r with a 0,1 and then 0,3 risk aversion coefficient
    • you may also calculate the average income
3) Watch the detailed answer
                                          video(4 min)