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Behavior Economics question Jake, who has reference-dependent preferences over beer and money, goes to the local pub with a friend, but is not planning on

Behavior Economics question

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Jake, who has reference-dependent preferences over beer and money, goes to the local pub with a friend, but is not planning on drinking any beer or spending any of his $50 in cash. Let his end-of-evening outcomes in pints of beer consumed and cash be b and m, respectively, and let his reference point in pints of beer and cash be re and I'm, respectively. Jake's utility is given by v(6b - 6rb) + v(m -Im) , where v(x) = x when x 20 1.5x when x

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