Consider the Example Given on Pages 3-12 and 3-13$k_{v}=k_{c}=1$ , That Is Both Costs and Rewards Are Immediate

Question

Examlex · Accepted Answer

The Answer is At

t=2

the sophisticate solves the following problem,

\max \{\beta(20-9),-\beta\}=

\max \left\{5.5,-\frac{1}{2}\right\}

. And so the sophisticate chooses

t=2 . \ln t=1

, the sophisticate solves

\max \{\beta 8, \beta(20-9)\}=\max \{4,5.5\}

and so the sophisticate chooses to act in

t=2

.

Consider the Example Given on Pages 3-12 and 3-13 $k_{v}=k_{c}=1$ , That Is Both Costs and Rewards Are Immediate