Question: Lets say that you are facing a choice between A: Doomscrolling this morning (3 utils at time 0), B: playing ultimate frisbee with your friends

Lets say that you are facing a choice between A: Doomscrolling this morning (3 utils at time 0), B: playing ultimate frisbee with your friends this afternoon (4 utils at time 1), and C: watching a movie with some friends this evening (7 utils at time 2). Unfortunately, if you doomscroll, you make yourself too depressed to hang out with anyone for the rest of the day, and if you play frisbee you deplete all you energy for social engagements. Thus the three alternatives are mutually exclusive.

a) If you are an exponential discounter, with = 12 , what do you chose?

b) If you are a naive hyperbolic discounter, with = 12 and = 1, what do you chose?

c) If you are a sophisticated hyperbolic discounter, with = 12 and = 1, what do you choise?

d) As a sophisticated hyperbolic discounter, are you procrastinating or preproperating (doing something earlier than you should have)?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!