6. For each of the following three scenarios, would you rather: a. Receive $100 in one month or $100 in two months (most people prefer the former)? b. Be given an excellent meal at a nice restaurant in one month or in two months (most people prefer the former)? c. Be given a mediocre meal at a mediocre restaurant in one month and then an excellent meal at a nice restaurant in two months or an excellent meal at a nice restaurant in one month followed by a mediocre meal at a mediocre restaurant in two months (most people prefer the former)? Assume that you respond as do most people. Explain any inconsistency in your preferences using behavioral finance.

Answer rating: 100% (QA)

Answer These scenarios are related to the concept of time preference and reveal certain patterns of decisionmaking that might seem inconsistent from a ... View the full answer