There are peer effects, but they differ for the two individuals, u_{1} = x_{1} - x_{1} ^

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There are peer effects, but they differ for the two individuals, u_{1} = x_{1} - x_{1} ^ 2 + beta_{1}*x_{1}*x_{2} with B_{1} = 1 U_{2} = O - x_{2} ^ 2 + beta_{2}*x_{1}*x_{2} with B_{2} = 0

1) Find (x*x*) utility, maximizing consumption choices.

2) How do peer effects influence the two individuals? Explain using the best responses.

Related Book For answer-question

Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

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Posted Date: Mar 28, 2024 01:01 AM

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There are peer effects, but they differ for the two individuals, u_{1} = x_{1} - x_{1} ^

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ANSWER In summary peer effects influence th... View the full answer

Microeconomics An Intuitive Approach with Calculus

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