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Adwoa's friend tells her that 2001: Space Odyssey is good. Adwoa is trying to decide between reading the book and watching the movie. Assume that the...
Adwoa's friend tells her that 2001: A Space Odyssey is good. Adwoa is trying to decide between reading the book and watching the movie.
Assume that the movie yields an immediate utility of 1 in the single period (single day) during which Adwoa watches it, and a utility of 0 thereafter.
Assume that the book yields a utility of 0.1 for each of 100 periods during which she reads it, and a utility of 0 thereafter.
t=u(ct)+β∑i=t+1∞δiu(ci), representing the fact that she discounts the utility of future consumption.
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