Consider a fully additive model with one consumption good, $U\left(c_{i}\right)$, where $i$ indexes time. If $\delta

Name: Consider a fully additive model with one consumption good, $U\left(c_{i}\right)$, where $i$ indexes time. If $\delta<1$ then the fully additive model predicts $c_{i}<c_{j} \forall i<j$.
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Question

Consider a fully additive model with one consumption good, $U\left(c_{i}\right)$, where $i$ indexes time. If $\delta<1$ then the fully additive model predicts $c_{i}<c_{j} \forall i<j$.

Quizplus · Accepted Answer

$c_{i}\left\langle c_{j} \forall i>j\right.$. Thus, consumption in period 1 is greater than consumption in period 2. But, the discounted marginal utility is constant across time.

Consider a Fully Additive Model with One Consumption Good U(ci)U\left(c_{i}\right)U(ci​) , Where

Consider a Fully Additive Model with One Consumption Good $U\left(c_{i}\right)$ , Where