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- We use the same discounted prices {ÃÂi,t}n i=1 as the ones given in Adams et al. (2014).46 These are the prices faced by the single-individual households in our application. We consider consumers with the constant elasticity of substitution (CES) instantaneous utility u(ct) = L X l=1 c1−à t,l 1 − à , where à ∼ U[1/15, 100] is heterogeneous across individuals. The consumers are exponential discounters with heterogeneous random discount factor d ∼ U[0.8, 1].
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