issue with HW7 Q5

[rhuselid]

I am getting returns for Q5 but it appears to be incorrect. I worked through the logic/structure during office hours, but still running into issues. Do you have any suggestions? Thanks!

state_vals = np.linspace(11, 39, 29)

P = []
for i in range(29):
    probs = np.zeros(29)
    if i == 0:
        probs[0] = 0.5
        probs[1] = 0.5
    elif i == 28:
        probs[28] = 0.5
        probs[27] = 0.5
    else:
        probs[i] = 0.5
        probs[i-1] = 0.25
        probs[i+1] = 0.25
    P.append(probs)

P = np.array(P)

def compute_rwage(c=15, w_vals=state_vals, beta=0.9, max_iter = 10000, tol = 1e-5, n=1000):
    #w = 10 # starting val
    v = w_vals / (1 - beta)
    v_next = np.empty_like(v)
    i = 0
    error = tol + 1 

    while error > tol and i < max_iter:
        for j, w in enumerate(w_vals):
            stop_val = w / (1 - beta)
            p_vals = P[i,:]
            exp_val = c + beta * np.sum(v * p_vals)
            v_next = max(stop_val, exp_val)
        error = np.max(np.abs(v_next - v))
        i += 1
        v = v_next

    reservation_wages = np.empty_like(w_vals)
    for i, val in enumerate(w_vals):
        p_vals = P[:,i]
        reservation_wages[i] = (1 - beta) *  c + beta * np.sum(v * p_vals)

    return reservation_wages, v

result:

[jmbejara]

This looks mostly fine to me. The question doesn't ask anything about a reservation wage