題組內容

3. An individual lives for one period with certainty and may live into a second period with probability $ \rho $, where $ 0 \leq \rho \leq 1 $. He knows the value of $ \rho $. He does not find out whether he lives in the second period until after he has done his first period consumption. He has labor income $ w_1 = 2 $ in the first period of life, and no labor income in the second period of life. His first period utility is $ \ln(c_1) $. The time discount rate and interest rate are both zero.

(1) Find $c1$ and $c2$ assuming his second period utility is $\ln(c_2)$. (10%)

Assume now that his second period utility is: $u(c2) = \begin{cases} \ln(c2), & \text{if } c2 \geq c1 \\ \ln(c2) - 1, & \text{if } c2 < c_1 \end{cases}$.

題組內容

(1) Find $c1$ and $c2$ assuming his second period utility is $\ln(c_2)$. (10%)

Assume now that his second period utility is: $u(c2) = \begin{cases} \ln(c2), & \text{if } c2 \geq c1 \\ \ln(c2) - 1, & \text{if } c2 < c_1 \end{cases}$.

相關申論題

相關試卷

題組內容

(1) Find $c1$ and $c2$ assuming his second period utility is $\ln(c_2)$. (10%)Assume now that his second period utility is: $u(c2) = \begin{cases} \ln(c2), & \text{if } c2 \geq c1 \\ \ln(c2) - 1, & \text{if } c2 < c_1 \end{cases}$.

相關申論題

相關試卷

(1) Find $c1$ and $c2$ assuming his second period utility is $\ln(c_2)$. (10%)

Assume now that his second period utility is: $u(c2) = \begin{cases} \ln(c2), & \text{if } c2 \geq c1 \\ \ln(c2) - 1, & \text{if } c2 < c_1 \end{cases}$.