Question
Consider a quasi-hyperbolic discounter with = 0.9. Find the present-focus factor that makes her indifferent between the following pairs: a) 50 today or 200 in
Consider a quasi-hyperbolic discounter with = 0.9. Find the present-focus factor that makes her indifferent between the following pairs:
a) 50 today or 200 in 10 days
(b) 100 today or 500 in 15 days
(c) 250 today or 308.50 in 2 days
For which of the above pairs can we conclude that the decision-maker is not present-focused?
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Behavioral Finance And Wealth Management
Authors: Michael M. Pompian
2nd Edition
1118014324, 978-1118014325
