Which of the following weights on utility (over four periods starting with the current one)provide an illustration of hyperbolic discounting that could well lead to inconsistent choices over time?

Question

Quizplus · Accepted Answer

The weights in option C exhibit hyperbolic discounting, where the discounting factor decreases rapidly in the near future but flattens out in the distant future. This can lead to inconsistent choices over time as the same option may be preferred or rejected depending on how far away the payoff is. The other options exhibit either constant discounting (option D) or exponential discounting (options A and B), which do not result in such inconsistencies.

Which of the Following Weights on Utility (Over Four Periods