Mathematics for Economists

(Greg DeLong) #1

Cake eating problem


With backwards iteration for timet=T 2

βT^3 u^0 (ct)VT^0  1 (wtct) = βT^3 u^0 (ct)VT^0  1 (wT 1 )= 0
βT^3 u^0 (cT 2 ) = VT^0 1 (wT 1 ).

But how do we calculate
VT^0 1 (wT 1 )?
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