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How do present-biased preferences affect an individual's decision-making regarding future actions?
How do present-biased preferences affect an individual's decision-making regarding future actions?
In the example of a sophisticated time-inconsistent student, what is the initial action taken during the procrastination?
In the example of a sophisticated time-inconsistent student, what is the initial action taken during the procrastination?
What characterizes a commitment device like Stickk.com?
What characterizes a commitment device like Stickk.com?
What was the outcome of the commitment savings product designed in the Philippines?
What was the outcome of the commitment savings product designed in the Philippines?
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What was one of the main findings related to women and the commitment device developed in Ashraf et al (2006)?
What was one of the main findings related to women and the commitment device developed in Ashraf et al (2006)?
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What is the main parameter being measured in the Marshmallow Test?
What is the main parameter being measured in the Marshmallow Test?
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What correlation was discovered between waiting time and SAT scores in the Marshmallow Test?
What correlation was discovered between waiting time and SAT scores in the Marshmallow Test?
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What does the T3 factor represent according to the data provided?
What does the T3 factor represent according to the data provided?
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What did the field evidence by Meier and Sprenger focus on?
What did the field evidence by Meier and Sprenger focus on?
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Which range of values is most likely represented by DF1 in the first activity?
Which range of values is most likely represented by DF1 in the first activity?
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What were the estimates of beta (β) in Meier and Sprenger’s results?
What were the estimates of beta (β) in Meier and Sprenger’s results?
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Which of the following factors could lead to potential problems in the multiple price list (MPL) approach?
Which of the following factors could lead to potential problems in the multiple price list (MPL) approach?
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In the context of the two activities, what does a higher percent in the graphs signify?
In the context of the two activities, what does a higher percent in the graphs signify?
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What is the significance of comparing the data from different months?
What is the significance of comparing the data from different months?
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What does the stability of estimates between 2007 and 2008 suggest about time preferences?
What does the stability of estimates between 2007 and 2008 suggest about time preferences?
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Within the context of Meier and Sprenger's study, what does δ represent?
Within the context of Meier and Sprenger's study, what does δ represent?
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How is the structure of DF3 different from DF1 and DF2?
How is the structure of DF3 different from DF1 and DF2?
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In the Marshmallow Test, how much of an increase in SAT math scores was indicated for waiting an additional 5 minutes?
In the Marshmallow Test, how much of an increase in SAT math scores was indicated for waiting an additional 5 minutes?
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What conclusion can be drawn about the performance in the second half as compared to the first half?
What conclusion can be drawn about the performance in the second half as compared to the first half?
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What could a flat line in the percentage graphs indicate?
What could a flat line in the percentage graphs indicate?
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How many preschoolers were involved in the original Marshmallow Test conducted by Mischel et al?
How many preschoolers were involved in the original Marshmallow Test conducted by Mischel et al?
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What was a significant finding regarding early versus later payments in Meier and Sprenger's research?
What was a significant finding regarding early versus later payments in Meier and Sprenger's research?
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What trend might be observed between the first trimester and second trimester?
What trend might be observed between the first trimester and second trimester?
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Why might the activity graphs be important for decision-making?
Why might the activity graphs be important for decision-making?
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What might be the purpose of using various metrics like DF1, DF2, and DF3 across different months?
What might be the purpose of using various metrics like DF1, DF2, and DF3 across different months?
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What characteristic of the standard exponential discounting model limits its ability to represent human behavior in evaluating future outcomes?
What characteristic of the standard exponential discounting model limits its ability to represent human behavior in evaluating future outcomes?
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In the Moblab Activity 4, what was the primary choice participants had to make regarding their time preference?
In the Moblab Activity 4, what was the primary choice participants had to make regarding their time preference?
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What aspect distinguishes the behavioral model from the standard exponential model regarding time preference?
What aspect distinguishes the behavioral model from the standard exponential model regarding time preference?
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In Moblab Activity 5, how was the payment structure presented to participants?
In Moblab Activity 5, how was the payment structure presented to participants?
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What does the cross-correlation table reveal about the discount factors in Moblab Activity 4 and 5?
What does the cross-correlation table reveal about the discount factors in Moblab Activity 4 and 5?
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What type of tasks were included in the Moblab Activities to explore time preference?
What type of tasks were included in the Moblab Activities to explore time preference?
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How does the behavioral model address impatience differently than the standard exponential discounting model?
How does the behavioral model address impatience differently than the standard exponential discounting model?
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Which task in Moblab Activity 4 required participants to choose between consumption at two separate future points?
Which task in Moblab Activity 4 required participants to choose between consumption at two separate future points?
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What financial concept primarily underlies the choices presented in Moblab Activities 4 and 5?
What financial concept primarily underlies the choices presented in Moblab Activities 4 and 5?
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Which of the following statements correctly describes the discount factors across tasks in the provided correlations?
Which of the following statements correctly describes the discount factors across tasks in the provided correlations?
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What is the discount factor (δ) when a person is indifferent between receiving $105 in one month and $100 today, assuming risk neutrality?
What is the discount factor (δ) when a person is indifferent between receiving $105 in one month and $100 today, assuming risk neutrality?
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In the context of risk neutrality, how is it calculated when the utility function is u(c) = c?
In the context of risk neutrality, how is it calculated when the utility function is u(c) = c?
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What does the calculation of δ = 0.98 indicate about a person's risk preferences when their utility function is u(c) = c^0.5?
What does the calculation of δ = 0.98 indicate about a person's risk preferences when their utility function is u(c) = c^0.5?
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Why does the second method of calculation not depend on risk preferences?
Why does the second method of calculation not depend on risk preferences?
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How much would a risk-averse person need to be paid today to delay receiving $100 for one month if δ = 0.95?
How much would a risk-averse person need to be paid today to delay receiving $100 for one month if δ = 0.95?
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What characteristic of exponential discounting is highlighted in the scenario of receiving $20 weekly over two periods?
What characteristic of exponential discounting is highlighted in the scenario of receiving $20 weekly over two periods?
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When analyzing impatience in decision-making, what does a higher rate of $ ext{δ}$ signify?
When analyzing impatience in decision-making, what does a higher rate of $ ext{δ}$ signify?
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What relationship is demonstrated by the equation P24 i−1 δ i−1 (u(c + 20) − u(c)) = P52 i=25 δ i−1 (u(c + 20) − u(c))?
What relationship is demonstrated by the equation P24 i−1 δ i−1 (u(c + 20) − u(c)) = P52 i=25 δ i−1 (u(c + 20) − u(c))?
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Study Notes
Discount Rate Calculations
- Discount factor calculation assumes that individuals discount future rewards exponentially.
- The first discount rate calculation assumes risk-neutral preferences.
- The second discount rate calculation does not make any assumptions about risk preferences.
Time Preference Activities
- Moblab Activity 4: Participants choose between receiving $100 today or a larger amount in the future. Two variations involve different time periods.
- Moblab Activity 5: Participants chose between two payment plans for $20 per week for a number of weeks. Both plans have the same total payment but differ in the timing of the payments.
Correlations Across Tasks
- There are positive correlations between the discount factors observed in different time preference tasks.
- This suggests that individuals who are more impatient in one task are also likely to be more impatient in other tasks.
Evidence on Time Preferences
- The Marshmallow Test suggests that individuals who delay gratification are more successful in later life, as measured by higher SAT scores.
- The Meier and Sprenger study found that individuals are more likely to take an immediate smaller reward when the reward is immediate.
- The Meier and Sprenger study found that estimates of present bias parameter (β) and monthly discount factor (δ) were stable over time.
- Commitment savings products, like SEED in the Philippines, can be effective in encouraging individuals to save more.
- Websites like Stickk.com provide a platform for making binding agreements with oneself, helping individuals achieve their goals.
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Description
Explore the concepts of discount rates and time preferences through various activities and tasks. This quiz examines the relationships between individuals' choices and their patience across different scenarios, including the famous Marshmallow Test. Delve into the evidence and theories behind how people value future rewards compared to immediate gains.
