Strotz Meets Allais: Diminishing Impatience and the Certainty Effect: Comment
نویسندگان
چکیده
منابع مشابه
Allais Meets Strotz: Remarks on the Relation between Present Bias and the Certainty Effect
The paper establishes a tight relation between non-standard 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 rst complete characterization of the two-way relations between i) certainty e ect and present bias, and, ii) comm...
متن کاملDiminishing Impatience: Disentangling Time Preference from Uncertain Lifetime
A decision maker with time consistent preferences may exhibit diminishing impatience, when uncertain lifetime is accounted for. Uncertain lifetime captures not only the risk of mortality, but also the possibility that a promise for a delayed reward might be breached, or a postponed consumption might not be realized. The restrictions that time consistency imposes on additive intertemporal prefer...
متن کاملDiminishing marginal impatience: its promises for asset pricing
This study argues that diminishing marginal impatience (DMI ) as an intuitively plausible behavioural assumption of endogenous time preference has the potential for resolving important issues like the equity premium puzzle. It shows that, while applied to a model in the traditional overlapping generations (OG) framework, DMI is capable of generating assets prices with magnitude and volatility h...
متن کاملCautious Expected Utility and the Certainty Effect∗
Many violations of the Independence axiom of Expected Utility can be traced to subjects’ attraction to risk-free prospects. The key axiom in this paper, Negative Certainty Independence (Dillenberger, 2010), formalizes this tendency. Our main result is a utility representation of all preferences over monetary lotteries that satisfy Negative Certainty Independence together with basic rationality ...
متن کاملDecreasing impatience and the magnitude effect jointly contradict exponential discounting
The experimental literature on time preference nds that the manner in which subjects discount money (as opposed to utility) exhibits properties known as Decreasing Impatience and the Magnitude Effect. While these ndings are often referred to as anomalies for the Exponential Discounting model, several authors have demonstrated that each of these qualitative ndings can be explained by the curv...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: American Economic Review
سال: 2011
ISSN: 0002-8282
DOI: 10.1257/aer.101.5.2271