Suppose that each individual has the utility function U1(I)=I when there is no accident, but when there is an accident, an individual will feel that his life is hopeless and his utility function becomes U0(I)=0, for any I>=0 (so money is of no use to an individual having an accident). An insurance company offers a contract: if a person pays the company QZ dollars before he knows whether he has an accident, the person will receive Z dollars from the company when he does not have an accident (so I=20+Z-QZ), but receives 0 from the company if he has an accident (so I=15-QZ). Suppose that each insurance company gets 0 expected profit. Suppose that each individual can have negative income even after an accident, what will be an individual's choice of Z? 解答是写 Max EU=P*U0(15-QZ)+(1-P)U1(20+Z-QZ)=P*0+(1-P)(20+Z-QZ) F.O.C : (1-P)(1-Q)=0 ∴Z=0 我不懂如果真的要极大化效用，Z=0怎麽会是最大的，应该是最小的吧，在这样的 式子下，Z越大应该效用就越大呀，因为P、Q都介於0、1之间呀，请高手指教.. --

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