The Relation between Behavior under Risk and over Time
The paper establishes a tight relation between nonstandard behaviors in the domains of risk and time, by considering a decision-maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete c...
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| Veröffentlicht in: | The American economic review. Insights 2020-03, Vol.2 (1), p.1-16 |
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| Hauptverfasser: | , , |
| Format: | Artikel |
| Sprache: | eng |
| Online-Zugang: | Volltext |
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| Zusammenfassung: | The paper establishes a tight relation between nonstandard behaviors in the domains of risk and time, by considering a decision-maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present bias, and between the common ratio effect and temporal reversals. (JEL D11, D15, D81, D91) |
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| ISSN: | 2640-205X 2640-2068 |
| DOI: | 10.1257/aeri.20190051 |