Let S = (0,110), .5" = (100,0) and O = (0,0) be three streams of payoffs (S gives $0 in the rst period and $110 in the second period). And let L = (S,0.80;0,0.20) and L' = (S',0.80; 0, 0.20) be two lotteries (L gives 80% chances of receiving S and 20% chances of receiving 0). A DM has the following preferences: OSNS' oL>L" Using the possible ]ink between time discounting and probability weighting, please explain how such preferences could arise