Ben has a term paper due this Saturday at midnight. He can write it on Thursday,...

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Ben has a term paper due this Saturday at midnight. He can write it on Thursday, Friday, or Saturday. Whenever he writes the paper, he faces immediate costs. Writing the paper on Thursday, Friday, and Saturday will provide utility of -15, -40, and -70 respectively. Ben will receive delayed rewards from writing the paper through the utility over grades given out at the end of the semester. He doesn't have much time on Thursday since he has other work to complete. The future utility associated with writing the paper on Thursday, Friday, and Saturday is 60, 90, and 90 respectively. Assume that 3 and 6 = 1 and that Ben's utility is U=U₁+B[u₁+1+U₁+2+...]. (a) Fill out the table below with Ben's utility. For Thursday, calculate Ben's utility from completing the task on each of the three days. For Friday, calculate his utility for completing the task on Friday or on Saturday, and for Saturday, calculate his utility for completing the paper on Saturday. If Ben is naive, when will he work on the paper? Explain naive Ben's thought process. Thursday Options Friday Options Saturday Options u(complete on Th) u(complete on Fr) u(complete on Sa) X X X (b) If Ben is sophisticated, when will he work on the paper? Explain sophisticated Ben's thought process. (c) If Ben was an exponential (3= 1) utility maximizer, when would he work on the paper? (d) Who works on the paper earlier, sophisticated Ben or exponential Ben. Explain the result intuitively. Ben has a term paper due this Saturday at midnight. He can write it on Thursday, Friday, or Saturday. Whenever he writes the paper, he faces immediate costs. Writing the paper on Thursday, Friday, and Saturday will provide utility of -15, -40, and -70 respectively. Ben will receive delayed rewards from writing the paper through the utility over grades given out at the end of the semester. He doesn't have much time on Thursday since he has other work to complete. The future utility associated with writing the paper on Thursday, Friday, and Saturday is 60, 90, and 90 respectively. Assume that 3 and 6 = 1 and that Ben's utility is U=U₁+B[u₁+1+U₁+2+...]. (a) Fill out the table below with Ben's utility. For Thursday, calculate Ben's utility from completing the task on each of the three days. For Friday, calculate his utility for completing the task on Friday or on Saturday, and for Saturday, calculate his utility for completing the paper on Saturday. If Ben is naive, when will he work on the paper? Explain naive Ben's thought process. Thursday Options Friday Options Saturday Options u(complete on Th) u(complete on Fr) u(complete on Sa) X X X (b) If Ben is sophisticated, when will he work on the paper? Explain sophisticated Ben's thought process. (c) If Ben was an exponential (3= 1) utility maximizer, when would he work on the paper? (d) Who works on the paper earlier, sophisticated Ben or exponential Ben. Explain the result intuitively.

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Answer a The table would look like this Day of Completion Thursday Options Friday Options Saturday O... View the full answer