The tiny island of Ditto contains two identical towns, East Doppelganger and West Doppelganger. Each year, the
Question:
The tiny island of Ditto contains two identical towns, East Doppelganger and West Doppelganger. Each year, the 100 citizens of each town compete in their annual New Year’s resolution challenge. In November, the mayors got together and agreed that all their townspeople could use more exercise, so for the upcoming year’s challenge, each citizen would be asked to walk around the local volcano each day, a distance of exactly 1 mile, starting January 1 for three consecutive months. The winning town, based on the total number of miles walked, would get to host the next annual Looking Glass Festival, the biggest celebration on the island. This year, the mayor of East Doppelganger decided to announce the challenge to the citizens of the town on December 1, while the mayor of West Doppelganger chose to wait until New Year’s Eve to make the announcement. Assuming that all the citizens of both towns are equally healthy, are not terribly fond of exercise even though they know it is good for their health, and are completely honest (so no one cheats as far as the number of miles walked), use the model of hyperbolic discounting to explain which town will likely win the challenge.
Step by Step Answer:
Principles Of Macroeconomics
ISBN: 9781292303826
13th Global Edition
Authors: Karl E. Case,Ray C. Fair , Sharon E. Oster