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g) lCompare the behavior of the naive to the behavior of the sophisticated and exponential individual using the solutions above. Provide intuition. h) Consider now

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g) lCompare the behavior of the naive to the behavior of the sophisticated and exponential individual using the solutions above. Provide intuition. h) Consider now the case in which the setting is the same as above, but the cost of investment It is stochastic, with Lid. draws in each period t. Show that the decision rule for an exponential agent will be of the type: Invest today if R:

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