Tempospect Theory of Intertemporal Choice

Tempospect Theory of Intertemporal Choice

Anomalies in intertemporal choice (e.g. hyperbolic discounting, subadditive discounting, a sign effect, a magnitude effect, and a delay-speedup asymmetry) have been investigated in neuroeconomics and behavioral neuroeconomics. In this study we propose a “tempospect” theory of intertemporal choice which can account for these anomalies in intertemporal choice. The key features of the present theo...

Intertemporal Choice

Modern Portfolio Theory, Digital Portfolio Theory and Intertemporal Portfolio Choice

The paper compares three portfolio optimization models. Modern portfolio theory (MPT) is a short-horizon volatility model. The relevant time horizon is the sampling interval. MPT is myopic and implies that investors are not concerned with long-term variance or mean-reversion. Intertemporal portfolio choice is a multiple period model that revises portfolios continuously in response to relevant s...

A note on the Loewenstein-Prelec theory of intertemporal choice

In one of the major contributions to behavioral economics, Loewenstein and Prelec [Loewenstein, G., Prelec, D., 1992. Anomalies in intertemporal choice: evidence and an interpretation. The Quarterly Journal of Economics 107, 573–597] set the foundations for the behavioral approach to decision making over time. We correct a number of errors in Loewenstein and Prelec (1992). Furthermore, we provi...

Intertemporal Choice and Inequality

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