http://www.liuyanecon.com/wp-content/uploads/EFG-SS-1.pdf WebAn essential feature of the cake-eating problem (P) is the postulation of the same utility func-tion for both attributes. As we will see, a number of applications can support this assumption. In the case of individual decision-making, this assumption is standard for intertemporal de-

How to Cut Cake Fairly and Finally Eat It Too Quanta …

WebProblem Set #4 Economics 808: Macroeconomic Theory Fall 2004 1 The cake-eating problem Consider the optimal growth problem (discrete time) where: f(k) = k This … WebThe Three-Period Problem Suppose that the individual has three days to eat a cake of size x. Let c denote the piece of cake eaten on day 0. The remaining cake at the beginning of period 1 is then x c , and tghe individual at that time has two periods that remain to eat the cake of size x c . mls ball graphic

How to prove that cake-eating problem has no solution?

WebThe key trade-off in the cake-eating problem is this: • Delaying consumption is costly because of the discount factor. • But delaying some consumption is also attractive because is concave. The concavity of implies that the consumer gains value from consumption smoothing, which WebFor our “cake-eating” problem, let us set up the initial values. Note that, the way things are defined, there is a relationship between the initial amount of resource A and the number of grid points necessary in order to approximate the state (we could instead define a density of grid points for WebProblem Set #4 Economics 808: Macroeconomic Theory Fall 2004 1 The cake-eating problem Consider the optimal growth problem (discrete time) where: f(k) = k This problem is commonly called a “cake-eating” problem. The consumer starts with a certain amount of capital, and “eats” it over time. We will use this problem to try some dynamic ... in house wiring is white hot