Answer the following questions, fully justifying your answers:

a) Consider this table that shows the average saving rate (as a percent) for employees that chose to participate in the SMarT plan (see Thaler and Benartzi, 2004) and those that chose not to participate.

b) Let be the present period. From time s perspective, what property do the relative weights of successive periods utilities have in an exponential discounting model? How about in a quasi-hyperbolic discounting model? What is the implication of the latter property?

Answer the following questions, fully justifying your answers: a) Consider this table that shows the average saving rate (as a percent) for employees that chose to participate in the SMarT plan (see Thaler and Benartzi, 2004) and those that chose not to participate. AVERAGE SAVING RATES (%) FOR IMPLEMENTATION OF SMART Participants Who Joined Participants Who Declined the SMART Plan the SMART Plan All Participants choosing each option 100 50 150 Pre-advice 4 2 3.3 After pay raise 12 2 8.7 Discuss these results and relate them to concepts we have discussed. b) Let t be the present period. From time t's perspective, what property do the relative weights of successive periods' utilities have in an exponential discounting model? How about in a quasi-hyperbolic discounting model? What is the implication of the latter property? Answer the following questions, fully justifying your answers: a) Consider this table that shows the average saving rate (as a percent) for employees that chose to participate in the SMarT plan (see Thaler and Benartzi, 2004) and those that chose not to participate. AVERAGE SAVING RATES (%) FOR IMPLEMENTATION OF SMART Participants Who Joined Participants Who Declined the SMART Plan the SMART Plan All Participants choosing each option 100 50 150 Pre-advice 4 2 3.3 After pay raise 12 2 8.7 Discuss these results and relate them to concepts we have discussed. b) Let t be the present period. From time t's perspective, what property do the relative weights of successive periods' utilities have in an exponential discounting model? How about in a quasi-hyperbolic discounting model? What is the implication of the latter property