Suppose an individual, Dili, is deciding whether to invest in a project Dili has utility function U(y) y, where y is net income in dollars The project costs $50 this year (t 0), $10 next year (t 1), and nothing in the following year (t 2) It will provide benefits of $40 next year (t 1) and $40 in the following year (t 2) Suppose Dili has time consistent preferences with discount factor Will Dili invest in the project Suppose Dili has time inconsistent preferences with discount factor and present bias parameter Will Dili invest in the project Now suppose Dili has time inconsistent preferences with discount factor and present bias parameter Dili has the option to start investing in the project next year (i e , the project would cost $50 in year t 1 and $10 year t 2 and provide benefits of $40 in year t 2 and $40 in year t 3) Will Dili plan to start investing in the project next year, assuming she could commit to doing so Now suppose Dili could not commit to investing in the project next year and is aware of her time inconsistent preferences with discount factor and present bias parameter Will Dili plan to start investing in the project next year Explain how this answer compares with part c

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Suppose an individual, Dili, is deciding whether to invest in a project. Dili has utility function U(y) = y, where y is net income in

Suppose an individual, Dili, is deciding whether to invest in a project. Dili has utility function U(y) = y, where y is net income in dollars. The project costs $50 this year (t=0), $10 next year (t=1), and nothing in the following year (t=2). It will provide benefits of $40 next year (t=1) and $40 in the following year (t=2).

Suppose Dili has time-consistent preferences with discount factor . Will Dili invest in the project?
Suppose Dili has time-inconsistent preferences with discount factor and present bias parameter .Will Dili invest in the project?
Now suppose Dili has time-inconsistent preferences with discount factor and present bias parameter . Dili has the option to start investing in the project next year (i.e., the project would cost $50 in year t=1 and $10 year t=2 and provide benefits of $40 in year t=2 and $40 in year t=3). Will Dili plan to start investing in the project next year, assuming she could commit to doing so?
Now suppose Dili could not commit to investing in the project next year and is aware of her time-inconsistent preferences with discount factor and present bias parameter . Will Dili plan to start investing in the project next year? Explain how this answer compares with part c.