U ( w) – u ( w – 1) = u ( w + 1) – u ( w) U ( w) – u ( w – 1) lt; u ( w + 1) – u ( w) Lets continue to look at how people behave. Do

U ( w) – u ( w – 1) = u ( w + 1) – u ( w) U ( w) – u ( w – 1) < u ( w + 1) – u ( w) Let”s continue to look at how people behave. Do preferences change as wealth changes? Let”s think intertemporally: T0: Investor w=12,000; risky assets = 6,000 T1 : Investor w=20,000; risky assets = ????