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Chapter 2. Rationality and Dynamic Consistency Under Risk and Uncertainty
Hammond, Peter J.; Zank, Horst - In: Handbook of the economics of risk and uncertainty : volume 1, (pp. 41-97). 2014
For choice with deterministic consequences, the standard rationality hypothesis is ordinality, i.e., maximization of a weak preference ordering. For choice under risk (resp. uncertainty), preferences are assumed to be represented by the objectively (resp. subjectively) expected value of a von...
Persistent link: https://www.econbiz.de/10014025530
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Anticipations and endogenous present bias
Galperti, Simone; Strulovici, Bruno - 2015 - Preliminary and incomplete
Persistent link: https://www.econbiz.de/10010498522
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Hyperbolic discounting can be good for your health
Strulik, Holger; Trimborn, Timo - 2018
It has been argued that hyperbolic discounting of future gains and losses leads to time-inconsistent behavior and … future hyperbolically and make time-consistent decisions. This allows us to disentangle the role of discounting from the time … consistency issue. We show that hyperbolically discounting individuals, under a reasonable normalization, invest more in their …
Persistent link: https://www.econbiz.de/10011782440
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Hyperbolic discounting can be good for your health
Strulik, Holger; Trimborn, Timo - 2016
It has been argued that hyperbolic discounting of future gains and losses leads to time-inconsistent behavior and … future hyperbolically and make time-consistent decisions. This allows us to disentangle the role of discounting from the time … consistency issue. We show that hyperbolically discounting individuals, under a reasonable normalization, invest more in their …
Persistent link: https://www.econbiz.de/10011576335
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Validating an ultra-short survey measure of patience
Vischer, Thomas; Dohmen, Thomas; Falk, Armin; Huffman, David - 2013
This study presents results of the validation of an ultra-short survey measure of patience included in the German Socio-Economic Panel (SOEP). Survey responses predict intertemporal choice behavior in incentive-compatible decisions in a representative sample of the German adult population.
Persistent link: https://www.econbiz.de/10009787974
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Why Do People Discount? The Role of Impatience and Future Uncertainty
Diecidue, Enrico; Hjördis Hardardottir; Islam, Marco - 2023
discounting is commonly regarded as a reflection of impatience. This interpretation of time discounting rests on the assumption … that risk preferences are fully controlled for in the estimation of time discounting and no longer act as a confounder … observed time discounting can be explained by an aversion against future uncertainty rather than impatience. Future uncertainty …
Persistent link: https://www.econbiz.de/10014255481
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Be patient when measuring Hyperbolic Discounting : stationarity, time consistency and time invariance in a field experiment
Janssens, Wendy; Kramer, Berber; Swart, Lisette - 2015
Most evidence of hyperbolic discounting is based on violations of either stationarity or time consistency as observed … discounting is a plausible explanation for choice reversals only if violations of stationarity and time consistency overlap. Our … conclude that when incomes fluctuate, one can only identify hyperbolic discounting by eliciting violations of both stationarity …
Persistent link: https://www.econbiz.de/10011307819
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Updating ambiguity averse preferences
Hanany, Eran; Klibanoff, Peter - 2008
Dynamic consistency leads to Bayesian updating under expected utility. We ask what it implies for the updating of more general preferences. In this paper, we characterize dynamically consistent update rules for preference models satisfying ambiguity aversion. This characterization extends to...
Persistent link: https://www.econbiz.de/10010266275
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Estimating present bias and sophistication over effort and money
Cerrone, Claudia; Chakraborty, Anujit; Kim, Hyok Jung; … - 2023
We design and implement the first real-effort experiment that can jointly estimate present bias (β) and sophistication (bβ), with separate preference parameters for money (βm, bβm) and effort (βe, bβe). In our study, participants chose to (and predicted to) complete 14% (and 10%) fewer...
Persistent link: https://www.econbiz.de/10014444409
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On the persistence of dishonesty
Bortolotti, Stefania; Kölle, Felix; Wenner, Lukas - 2021
In social and economic interactions, individuals often exploit informational asymmetries and behave dishonestly to pursue private ends. In many of these situations the costs and benefits from dishonest behavior do not accrue immediately and at the same time. In this paper, we experimentally...
Persistent link: https://www.econbiz.de/10012614781