Multiple Choice
Jan is a hyperbolic discounter. She puts weight 1 on utility earned in the current period but only weight .5 on utility earned in future periods. In period 1 she comes up with a plan,which involves taking some action that leads to a loss of C utils in period 2 but provides a benefit of B utils in period 3. What values of B and C will lead her to behave inconsistently and not follow through on her plans?
A) C < B < 2C.
B) B < C.
C) B > 2C.
D) B < C < 2B.
Correct Answer:
Verified
Correct Answer:
Verified
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