Calculation of Average Income Difference in the One-Lender, Five-Borrower Model
To find the average income difference in the one-lender, five-borrower model, all 15 unique pairwise differences are summed and then divided by 15. The total sum is derived from two components: the five differences between the lender and each borrower, which are all $6s - 1$, and the ten differences between pairs of borrowers, which are all zero. This leads to the final calculation for the average difference:
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Ch.9 Lenders and borrowers and differences in wealth - The Economy 2.0 Microeconomics @ CORE Econ
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Calculation of Average Income Difference in the One-Lender, Five-Borrower Model
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