Gevrek, Deniz; Gevrek, Zahide Eylem - Institute for the Study of Labor (IZA) - 2008
utility functions in the flrst and the second periods. They are twice
continuously difierentiable, eu 2 C2 and u 2 C2 …, increasing and concave, eu0 > 0, u0 > 0,
eu00 < 0, and u00 < 0. Because their arguments are in difierent units (time vs. income … maximize her
lifetime utility. We can formally state her utility maximization problem as:
max
fe;lg
eu …