#econimcs

Last Week Tonight with John Oliver: Debt Buyers (HBO)  

Present bias is one’s inclination to benefit from an immediate reward rather than being patient and wait for a greater pay off. This is seen in people when they are given the decision of getting $105 in a year or $100 in 50 weeks. The rational decision is to take the $105, which is the dominant decision given how distant the futures are. The results change when people are asked to decide whether they want $100 today or $105 in a week. The rational decision should be to take the $105 next week, however people usually choose the $100 today due to the immediate reward. When people choose the immediate $100, then they should also prefer it in 50 weeks instead of waiting two more weeks for $105. 

It's About Wall St. but it's Not All About Speculation