How Important is the Time Value of Money in Decision Making? Results of an Experiment

This paper tests how important the time value of money (TVM) principle is in decision making real-life conditions, when different selection criteria can be considered. A three-stage survey was administered to students from a Romanian university economics. They were asked choose between two cars. These cars have equal total cash outflows but present values. The benefits using them not specified, thus inducing model ambiguity: respondents may consider only flows, they other benefits, too. It tested whether answers remain stable supplementary information provided. explained their motivations. Probit regressions used explain preferences for applying or TVM, switching one answer another, and converging response compatible with preference TVM. TVM main criterion. Financial education had no impact on opinion.