The research has various strengths that future researchers can learn from. Even though the research seems to be complicated, the clever way researchers connect the papers with reality makes it easier for readers to focus.
Are Time Preference and Risk Preference Associated with Cognitive Intelligence and Emotional Intelligent: A review There have been various researchers discovering factors affecting time preference and risk preference between individuals. Time preference varies across individuals (Becker & Mulligan, 1997) However, the correlation between time preference and emotional intelligence and the connection between risk preference and cognitive intelligence was first explained by four analysts in 2019 This essay will discuss the research and be clearly divided into parts There will be a summary of the paper in the second paragraph. While the third paragraph magnifies the strengths and contributions of the paper, the penultimate paragraph illustrates the limitations of the research and the fifth paragraph concludes The main objectives of the research are to investigate whether there are relationships between cognitive intelligence (represented by the intelligent quotient, IQ) as well as emotional intelligence (indicated by the emotional quotient, EQ) and time preference along with risk preference and to find statistics to support their claim Researchers concluded the analysis based on prospect theory (PT) and quasihyperbolic discounting, both of which were based on the traditional expected utility theory (EUT) The experiment supporting the hypothesis of researchers was conducted among 146 junior and senior business undergraduates found through advertisements and mass emails. The participants have the obligation to fill in the given form by pencil. The regression results showed that the estimated coefficients were negative, meaning that the higher IQ and EQ are, the closer the connection of time preference and traditional time preference is. The regression results also demonstrated that higher IQ and EQ will find risk preference more relevant to the tradition, EUTtype risk preference. As a result, the paper finalized that individuals with higher EQ are less likely to be affected by the present and the future, therefore they have a lower subjective rate of time preference. HighIQ subjects obtain less curvature in the utility function, less probability weighting and less aversion to losses The research will help the authority to impose suitable policies to motivate residents to accumulate wealth for children’s college fees and retirement. Analysts also suggested further experiments on the basis of other modern theories The research has various strengths that future researchers can learn from. Even though the research seems to be complicated, the clever way researchers connect the papers with reality makes it easier for readers to focus. The introduction has linked the analysis to some important discoveries and information that was revealed by several renowned scientists The introduction also clearly states the contributions and objectives of the analysis. The literature review contains five parts covering each terminology and the way each of them was developed. The audience can easily understand each term and how it is constructed in the experiment. The survey of the experiment was thoroughly built and explained so that the subjects of the research find it convenient to answer The first conclusion of the research is that higher EQ residents are prone to being less likely to be affected by present and future bias; which help the authority to impose policy at the right time. The second idea given by the paper is that high IQ have less curvature in the utility function, less probability weighting and less aversion to loss, which help the policymakers to focus on the suitable financial instruments in the country. On the other hand, the research has its own limitations that need adjusting by other scientists in future experiment The sample of the experiments was business undergraduate students, which may not have the same opinions as office workers. Besides, the sample contained Americans, which may also have different perspectives of saving and investment compared to residents in Europe or developing countries. It was discovered that the risk attitudes between residents of different countries can influence the level of labor mobility and migration (Jaeger et al., 2010). Moreover, the sample consisted of only 146 participants, which can be considered to be small compared to other analysis with at least 300 subjects The analysis applied expected utility theory, in particular, prospect theory and quasi hyperbolic theory, which can be regarded as old fashioned in 2019. Instead, they should look for more modern theory to applied as the modern theory proven by modern thinking and situations can bring about more relevant results. The traditional theory is not the only one tool to measure risk preference and time preference, individual retirement account (IRA) can be a variable explaining time and risk preference of investors (Schoemaker, 1993) Different ways of measuring risk preference (riskattitude surveys, selfreports, lottery choices or realworld decisions) bring about different results (Figner & Weber, 2011). The research does not show the relationship between cognitive intelligence and time preference. Higher IQ is assumed to be good illustrations of individual rates of time preference (Jones & PodemskaMikluch, 2010) In conclusion, the paper provides a statement for the study of behavioral finance. While the research indicates its own strength and contribution to the upcoming research, its problems are also prominent. Reference Becker, G.S and Mulligan, C.B., 1997 The endogenous determination of time preference. The Quarterly Journal of Economics, 112(3), pp.729758 Figner, B. and Weber, E.U., 2011. Who takes risks when and why? Determinants of risk taking. Current Directions in Psychological Science, 20(4), pp.211216 Jaeger, D.A., Dohmen, T., Falk, A., Huffman, D., Sunde, U. and Bonin, H., 2010. Direct evidence on risk attitudes and migration. The Review of Economics and Statistics, 92(3), pp.684689 Jones, G. and PodemskaMikluch, M., 2010. IQ in the utility function: Cognitive skills, time preference, and crosscountry differences in savings rates Schoemaker, P.J., 1993 Determinants of risktaking: Behavioral and economic views. Journal of Risk and Uncertainty, 6(1), pp.4973 ... results. The traditional theory is not the only one tool to measure risk preference and time preference, individual retirement account (IRA) can be a variable explaining time and risk preference ... contributions and objectives of the analysis. The literature review contains five parts covering each terminology and the way each of them was developed. The audience can easily understand each term and how it is ... analysis with at least 300 subjects The analysis applied expected utility theory, in particular, prospect theory and quasi hyperbolic theory, which can be regarded as old