Exam 13: Committing and Uncommitting

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When a sophisticate binds himself to a path of action using a commitment mechanism, at every period $t$ , he sees that he is better off with the commitment mechanism than without.

(True/False)

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Question 21

A sophisticate solves the inter-temporal model recursively, while a naiff solves the intertemporal problem simultaneously from the point of view of the first period.

(True/False)

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Question 22

A sophisticate cannot be made worse-off by committing.

(True/False)

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Question 23

Why is a naif unwilling to pay for a commitment mechanism?

(Multiple Choice)

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Question 24

Scenarios in which rewards are experienced in the same time period as the action to acquire the reward are called,

(Multiple Choice)

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Question 25

Consider the example given on pages 3-12 and 3-13. Suppose $k_{v}=k_{c}=1$ , that is both costs and rewards are immediate. Let the remaining parameters be unchanged, so that $v_{t}=$ $\{8,20,0\}, c_{t}=\{0,9,1\}, \beta=\frac{1}{2}, \delta=1$ . In this setting, the sophisticate obeys the dominance property.

(True/False)

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Question 26

An assumption that is implicitly built in to the fully additive inter-temporal model is

(Multiple Choice)

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Question 27

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

(True/False)

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Question 28

A partially naïf individual believes $\beta \neq \delta$ , but $\beta=\hat{\beta}$ . If $\beta=\frac{1}{2}$ , which of the following could be possible values of $\hat{\beta}$ ?

(Multiple Choice)

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Question 29

Showing 21 - 29 of 29

When a sophisticate binds himself to a path of action using a commitment mechanism, at every period $t$ , he sees that he is better off with the commitment mechanism than without.

A sophisticate solves the inter-temporal model recursively, while a naiff solves the intertemporal problem simultaneously from the point of view of the first period.

A sophisticate cannot be made worse-off by committing.

Why is a naif unwilling to pay for a commitment mechanism?

Scenarios in which rewards are experienced in the same time period as the action to acquire the reward are called,

An assumption that is implicitly built in to the fully additive inter-temporal model is

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

A partially naïf individual believes $\beta \neq \delta$ , but $\beta=\hat{\beta}$ . If $\beta=\frac{1}{2}$ , which of the following could be possible values of $\hat{\beta}$ ?

Rationality, Irrationality, and Rationalization

Transaction Utility and Consumer Pricing

Mental Accounting

Status Quo Bias and Default Options

The Winners Curse and Auction Behavior

Bracketing Decisions

Representativeness and Availability

Confirmation and Overconfidence

Decision Under Risk and Uncertainty

Prospect Theory and Decision Under Risk or Uncertainty

Disagreeing With Ourselves: Projection and Hindsight Biases

Naïve Procrastination

Selfishness and Altruism

Fairness and Psychological Games

Trust and Reciprocity

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Exam 13: Committing and Uncommitting

When a sophisticate binds himself to a path of action using a commitment mechanism, at every period ttt , he sees that he is better off with the commitment mechanism than without.

A sophisticate solves the inter-temporal model recursively, while a naiff solves the intertemporal problem simultaneously from the point of view of the first period.

A sophisticate cannot be made worse-off by committing.

Why is a naif unwilling to pay for a commitment mechanism?

Scenarios in which rewards are experienced in the same time period as the action to acquire the reward are called,

An assumption that is implicitly built in to the fully additive inter-temporal model is

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

A partially naïf individual believes β≠δ\beta \neq \deltaβ=δ , but β=β^\beta=\hat{\beta}β=β^​ . If β=12\beta=\frac{1}{2}β=21​ , which of the following could be possible values of β^\hat{\beta}β^​ ?

Rationality, Irrationality, and Rationalization

Transaction Utility and Consumer Pricing

Mental Accounting

Status Quo Bias and Default Options

The Winners Curse and Auction Behavior

Bracketing Decisions

Representativeness and Availability

Confirmation and Overconfidence

Decision Under Risk and Uncertainty

Prospect Theory and Decision Under Risk or Uncertainty

Disagreeing With Ourselves: Projection and Hindsight Biases

Naïve Procrastination

Selfishness and Altruism

Fairness and Psychological Games

Trust and Reciprocity

Filters

When a sophisticate binds himself to a path of action using a commitment mechanism, at every period $t$ , he sees that he is better off with the commitment mechanism than without.

A partially naïf individual believes $\beta \neq \delta$ , but $\beta=\hat{\beta}$ . If $\beta=\frac{1}{2}$ , which of the following could be possible values of $\hat{\beta}$ ?