Part II. Discounting and decision-making Rational Raina, Naive Ned, and Sophisticated Sophia each have an opportunity to go on their dream vacations to Havana, Cuba during winter break. Airline tickets are on a limited time sale. If they buy an air ticket this week (t-0), they only incur a cost of $200 for the ticket. Assume they have no other costs associated with their stay. They each value a trip to Havana at $2,250. However, they'll need to spend the intervening week (t-1) learning Spanish in preparation for the trip. If they fail to learn Spanish, they can't go. Each person considers this language requirement equivalent to an additional cost of $1,500. There's also a great sale on tickets to Vancouver, Canada for $200. No offense meant to Vancouver, but it's not quite a dream vacation: they value a vacation there at only $500. On the other hand, there's no need to study a new language. 1, Rational Raina is an exponential discounter with = 0.8. Given the cost and benefit schedule above, what vacation will she decide to take at t = 0? b. Next week, will Rania follow through on her commitment? Explain your answer 2. Naive Ned is a naive quasi-hyperbolic discounter with = 0.8 and 0.8. a. what will Ned decide to do at t = 0? b. Next week, will Ned follow through on his commitment? Explain your answer. 3, Sophisticated Sophia is a sophisticated quasi-hyperbolic discounter with 0.8 and = 0.8. Where will Sophia go (assume she has no commitment mechanism)