Pausch, Thilo; Schweimayer, Gerhard - Institut für Volkswirschaftlehre, Fakultät für … - 2004
follows that in the equilibrium it must hold true that
9This follows immediately from the well known covariance formula E[U0 …(~ƒi)~ ] = E[U0(~ƒi)]E[~ ]+
Cov[U0(~ƒi); ~ ] where E[~ ] = „ .
10See for example Wahl and Broll (2000) for a presentation … efiects drop
12That is, for this reasoning to hold we apply the envelope theorem: from (15) we know that in
the equilibrium E[U …