What is the formula for an isoelastic utility function?

1 Answer
Jan 20, 2016

U(x) = 1/(eta-1) x^( 1-eta)U(x)=1η1x1η
Where 1-eta = "elasticity"1η=elasticity
x = "wealth"x=wealth
eta get 0; eta ne 0 => "constant coefficient of risk aversion"ηt0;η0constant coefficient of risk aversion