Intertemporal Choice. Traditional Approach Anomalies New Theories Applications Controversy Extensions. Dynamic Choice Theory. Kreps (1988, 1979) X = menu, A dishes Changing Tastes and Sophisticated choice, Preference for Flexibility (states of preferences)
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Q5 In 60 days you are suppose to receive a new stereo system to replace your current one. Upon receipt of the system, you will have to pay $960. Are you willing to delay the transaction by 1 day for a discount of $2?
Q6 Tomorrow you are supposed to receive a new stereo system to replace your current one. Upon receipt of the system, you will have to pay $1080. Are you willing to pay the delay the delivery and the payment by 60 days for a discount of $120