Question
Suppose there are two goods. p >> 0. There are 2 consumers. Assume that each consumer i {1,2} has the following utility function: u(1,2)
Suppose there are two goods. p >> 0. There are 2 consumers. Assume that each consumer i {1,2} has the following utility function: u(1,2) = In + In 2+ 3 (lnxj1 + Inx,2), for ji, where B, (-1,0] measures how spiteful consumer i is towards j. Consider a Utilitarian social welfare function W(u, u2)=1+u2. Find the optimal wealth distribution rule.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
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