People tend to say that they would prefer to have R1 000 today rather than R1 200 two weeks from now - even though, logically, they would be better off with the R1 200 in two weeks.The phenomena underlying this tendency is known as ____.
A)risk aversion
B)the certainty effect
C)temporal discounting
D)the status quo bias

Question

Quizplus · Accepted Answer

The tendency to prefer immediate rewards over larger rewards in the future is known as temporal discounting. This is because people tend to discount the value of rewards that are further away in time. In this scenario, choosing R1 000 today over R1 200 in two weeks is an example of temporal discounting, as the person is valuing the immediate reward more highly than the larger reward in the future.

People Tend to Say That They Would Prefer to Have