Analyzing Preferences from a Utility Function
A person's preferences for dividing a sum of money between themself (amount z) and another person (amount y) are represented by the utility function U(z, y) = (z-100)^2 + (y-100)^2. A higher utility value indicates a more preferred outcome. Analyze the nature of this person's preferences. Are they purely selfish, purely altruistic, inequality-averse (preferring equal splits), or do they have some other characteristic? Justify your answer by calculating and comparing the utility for at least two different allocations of a fixed total amount, for example, £200.
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Introduction to Microeconomics Course
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Ch.5 The rules of the game: Who gets what and why - The Economy 2.0 Microeconomics @ CORE Econ
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Figure 5.3b: Constant MRS at a Given Level of Free Time