Let $\delta^{t-t^{\prime}}$ be the discount factor between $t$ and $t^{\prime}$, where $tt^{\prime}$. Naïve hyperbolic discounting implies which of the following is true? A) $\delta^{200-191}\delta^{9-0}$ D) $\delta^{200-191}=\delta^{9-0}$

Question

Let $\delta^{t-t^{\prime}}$ be the discount factor between $t$ and $t^{\prime}$, where $t>t^{\prime}$. Naïve hyperbolic discounting implies which of the following is true?
A) $\delta^{200-191}<\delta^{9-0}$
B) $\delta^{200-191}=\delta^{10-0}$
C) $\delta^{200-191}>\delta^{9-0}$
D) $\delta^{200-191}=\delta^{9-0}$

Quizplus · Accepted Answer

Naïve hyperbolic discounting implies that the discount factor between two time periods is greater for shorter time periods than for longer time periods. Therefore, $\delta^{200-191}>\delta^{9-0}$.

Let δt−t′\delta^{t-t^{\prime}}δt−t′ Be the Discount Factor Between ttt And t′t^{\prime}t′ , Where t>t′t>t^{\prime}t>t′ Naïve Hyperbolic Discounting Implies Which of the Following Is

Let $\delta^{t-t^{\prime}}$ Be the Discount Factor Between $t$ And $t^{\prime}$ , Where $t>t^{\prime}$ Naïve Hyperbolic Discounting Implies Which of the Following Is