Consider the canonical Becker and Murphy (1988) “rational addiction” model. Suppose people view $1 with certainty in one

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answerhappygod
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Consider the canonical Becker and Murphy (1988) “rational addiction” model. Suppose people view $1 with certainty in one

Post by answerhappygod »

Consider the canonical Becker and Murphy (1988) “rational
addiction” model.
Suppose people view $1 with certainty in one year as equivalent
to b dollars today, 0 ≤ b ≤ 1, where b varies across people. Would
you expect people with high values of b to be more or less
likely to acquire harmful addictions than people with low
values of b? Explain.
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