TASK

Fit the exponential and the quasi-hyperbolic discounting models to the intertemporal choice data and discuss the results.

The data is available on LMS (Modules à Assignments à data_InterTemporalChoice.csv). The data was obtained from an experiment in which participants repeatedly make               intertemporal choices between $20 (now) and a delayed-reward option (see                        https://forms.gle/cunxp1NT1gSdS27r5 for details). The data contains the three variables.

-    mag: reward magnitude of the delayed-reward option ($).

-    delay: reward delay of the delayed-reward option (days).

-    choice: 0 for $20 (now); and 1 for the delayed-reward option.

Added (10/05/): You are NOT allowed to copy texts, equations, and figures from the lecture slides (see the lecture slide for week 12 for details).

Added (22/05/): You can assume the non-discounted utility function as the identity function (see the lecture slide for week 12 for details).

ESSAY STRUCTURE

1.   Cover page:

-    Provide the relevant information: full name, student number, subject code and name, due date and assignment name. If you do not include these details, we cannot mark your       assignment.

2.   Introduction

-    Describe intertemporal choice and its ‘time-inconsistency’.

-    Describe the exponential and the quasi-hyperbolic discounting models and their relationship with the time-inconsistency of intertemporal choice.

3.   Methods

-    Describe the experimental design and data analysis.