Question
There are peer effects, but they differ for the two individuals, u_{1} = x_{1} - x_{1} ^ 2 + beta_{1}*x_{1}*x_{2} with B_{1} = 1 U_{2}
There are peer effects, but they differ for the two individuals, u_{1} = x_{1} - x_{1} ^ 2 + beta_{1}*x_{1}*x_{2} with B_{1} = 1 U_{2} = O - x_{2} ^ 2 + beta_{2}*x_{1}*x_{2} with B_{2} = 0
1) Find (x*x*) utility, maximizing consumption choices.
2) How do peer effects influence the two individuals? Explain using the best responses.
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Microeconomics An Intuitive Approach with Calculus
Authors: Thomas Nechyba
1st edition
538453257, 978-0538453257
