Two hundred and four students of economics and finance participated in an intertemporal choice experiment which manipulated three dimensions in a 4 \times 4 \times 4 factorial design: scenario (postponing a receipt, postponing a payment, expediting a receipt, expediting a payment), time delay (0.5, 1, 2, and 4 years), and size of cashflow ($40, $200, $1000, and $5000). Individual discount rates were inferred from the responses, and then used to test competitively four hypotheses regarding the behavior of discount rates. The classical hypothesis asserting that the discount rate is uniform across scenarios, time delays, and sums of cashflow was flatly rejected. A market segmentation approach was found lacking. The results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value, and an added compensation hypothesis which asserts that individuals require compensation for a change in their financial position.intertemporal decisions, time preference, discount rates

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This study investigates the relationship between macro-economic factors and the time pattern of the degree of merger activity in the U.S. economy. The results of the study imply that whether mergers are motivated by operating or financial synergy, they are closely related to lii;lcro-eco(ioniic factors. The findings also indicate that this relationship is stronger for pure conglonlcrate than for nun-conglomerate mergers, and that while the impact of the intcrcst rate on "cash" mergers is positive. for "securities" mergers the impact is negative. REVIEW OF FINANCIAL ECONOIMICS. VOL. 5. NO. 2. 1996 MERGERS AND MACRO-ECONOMIC FACTORS 183 MV.PC~ MN.PCI Mv.o MN.c-Mv.s-and MN.S where the subscripts V, N, NC, PC, C, and S. respectively denote dollar value of acquisitions, number of mergers, non-conglomerates, pure conglomerates, cash and securities mergers. The hypotheses postulated in the precedin, ~7 section imply that both al and a? are positive, except for securities mergers.