LRT and stock market efficiency. Show that if all individuals have LRT preferences v′ i /vi ″ ri  tyis and identical probability beliefs the stock market allocation is Pareto efficient (Hint: show...

LRT and stock market efficiency. Show that if all individuals have LRT preferences v′ i /vi ″ ri  tyis and identical probability beliefs the stock market allocation is Pareto efficient (Hint: show that the conditions imply that the dij  dj for all individuals and are independent of wealth so that yis is a linear function of the total income in state s.)