This seems to disregard time preferences. Losing $200 now hurts a lot more than the joy of earning $200 over the course of the following year.
If I set w to “amount currently in my checking account that I consider available for random impulse buys”—say $400 - then I get an answer that’s almost exactly in line with my intuition.
This seems to disregard time preferences. Losing $200 now hurts a lot more than the joy of earning $200 over the course of the following year.
If I set w to “amount currently in my checking account that I consider available for random impulse buys”—say $400 - then I get an answer that’s almost exactly in line with my intuition.