Question:

Suppose the sophisticated person is offered the opportunity to pay a small fee in order to commit to writing the paper on a specific day in the future. She will: a. Pay to commit to day 2 b. Pay to commit to day 1 c. She will not pay any amount to commit to a specific day d. Pay to commit to day 4 e. Pay to commit to day 3 There exist websites that offer people the opportunity to place even-money bets on their ability to lose a specific amount of weight. For example, you might bet $1000 that you could lose 10 pounds in 3 months. If you lost the weight, the company would pay you $1000; if you didn't, you would forfeit your $1000 bet. About 80 percent of people who enrolled in these bets failed to hit their weight loss targets. We can conclude that: a. People require commitment mechanisms b. People are information-averse and require commitment mechanisms c. People are over-confident d. People are information-averse and/or overconfident e. People are information-averse f. People require commitment mechanisms and/or are overconfident Consider two people participating in a taste test for a new and very unusual peanut-butter-marshmallow snack (assume it tastes at least pretty good). Person A participates in the taste test immediately after lunch. Person B participates in the taste test immediately before lunch. Both A and B return for the second part of the taste test the following week, just before lunch (i.e., at the same time). Person A is asked how much he would be willing to pay to eat another P.B+Marshmallow snack the following day, just after lunch. Person B is asked how much he would be willing to pay to eat another P.B+Marshmallow snack immediately after lunch today. Who is willing to pay more? a. We cannot give a definitive answer because of counteracting biases b. Person A because of a combination of projection and present bias c. Person B because of a combination of projection and present bias d. Person B because of a combination of attribution and present bias e. Person A because of a combination of attribution and present bias Consider a beauty contest game in which the winner is the person with the guess that is closest to 1.5 times the average. Dominated strategies include: a. All numbers less than 50 b. All numbers less than 1 c. All numbers less than 33 d. There are no dominated strategies