Consider a utility function where utility in period

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Consider a utility function where Utility in period t if a person exercises is 2, and utility in period t+1 if they exercise is 8. On the other hand if they donít exercise, their utility in period t is 6, and their utility in period t+1 is 4. Consider two scenarios. If the person has discounts geometrically across future utilities, with = :8; how does the person feel about exercising today. What about exercising 7 days from now? b. Alternatively, suppose an individual hyperbolically discounts, so the discount factor applied to period t is 1 1+t : How does the person feel about exercising today? What about exercising 7 days from now? Does this person have time-consistent or time-inconsistent choices?

Reference no: EM13998712

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