The difference in timing between rewards and costs explain the violation of the dominance property by naifs and sophisticates.

Question

Quizplus · Accepted Answer

The difference in timing between rewards and costs explains the violation of the dominance property by naifs and sophisticates because naifs underestimate the future costs or overestimate future rewards, leading to decisions that violate dominance principles, while sophisticates might anticipate their future behavior inaccurately, affecting their decision-making in a similar way.

The Difference in Timing Between Rewards and Costs Explain the Violation