Lecture 4: Time Preferences (Theory) II

[@abhishekkumarjha2467]

My Life is explained in this lecture, Behavioral Economics is a fascinating subjects. Great Lectures

[@dxnerd86]

Lecture summary: 'A stitch in time saves nine', with added maths.

[@yongmrchen]

If you’re truly sophisticated, you should be sophisticated when confronting investment goods while naïve when confronting leisure goods.

[@Marteenez_]

The first example with the naive vs sophisticated student, the sophisticated student knows if she waits till t=1 she will defer to t=2 based on the discounted utilities at that time point, this is based on the premise that she assumes she will not have any restraint, by not sticking with t=1, and so chooses t=2 when arriving in t=1. However, why can she then acknowledge this in t=0, by not choosing to defer, meaning that she can show restraint? If she can show restraint in t=0, why can't she see that utility for t=1 in t=0 is the lowest and choose that based on the current knowledge? She exhibits an ability to not choose the optimal utility in t=1, but is able to in t=0, it just seems a bit unintuitive?

[@Marteenez_]

Also, it was established that the naive student has betahat = 1, and the sophisticated student has betahat=beta. Why then on slide 54 onwards does the naive student discount using betahat = 0.5 as the sophisticated student does?

[@treydep9334]

Can some one tell me why instantainious Utility is not the same as t=0. Wouldnt t=0 be the first chance to make the decision.

[@treydep9334]

I think i had a brain fart. Please Ignore. Thank you in advance

[@welcomethanks5192]

What Newton said? You can calculate what , you cant calculate what? So why so many calculation? you better than Newton?

[@ankushsemalti4119]

At 1:06:30 What's the meaning of future misbehavior raises the cost of current misbehavior Like how it's related to investment goods numerical example?

[@yongmrchen]

These analyses are quite dubious.