Time discounting: psychophysics of intertemporal and probabilistic choices
نویسندگان
چکیده
Intertemporal and probabilistic choices have been attracting attention in behavioral neuroeconomics. Although recent advances in neuroeconomics demonstrated neural processes underlying intertemporal and probabilistic choices, the roles of psychophysical effects on the choices have largely been understudied. In this paper, we review the roles of psychophysical effects in time and risk attitudes. It is shown that Loewenstein-Prelec’s generalized hyperbolic temporal discount function (Loewenstein and Prelec, 1992) and Prelec’s probability weighting function (Prelec, 1998) are naturally derived from psychophysical laws of time-perception.
منابع مشابه
Running head: HEURISTICS EXPLAIN INTERTEMPORAL CHOICE 1 Money Earlier or Later? Simple Heuristics Explain Intertemporal Choices Better than Delay Discounting1
Heuristic models have been proposed for many domains of choice. We compare heuristic models of intertemporal choice, which can account for many of the known intertemporal choice anomalies, to discounting models. We conduct an out-of-sample, cross-validated comparison of intertemporal choice models. Heuristic models outperform traditional utility discounting models, including models of exponenti...
متن کاملTime Preference and its Effects on Intertemporal
Time preference has a peculiar role in determining the level of economic activities. Time preferenceis the most important origin of interest rate. In this paper we study the founders and defenders'viewpoints about time preference and then we try to criticize them. It seems that discounting futureutilities is resulting from irrationality and it is ethically indefensible too. From mathematical as...
متن کاملMoney earlier or later? Simple heuristics explain intertemporal choices better than delay discounting does.
Heuristic models have been proposed for many domains involving choice. We conducted an out-of-sample, cross-validated comparison of heuristic models of intertemporal choice (which can account for many of the known intertemporal choice anomalies) and discounting models. Heuristic models outperformed traditional utility-discounting models, including models of exponential and hyperbolic discountin...
متن کاملThe additive property of the inconsistency degree in intertemporal decision making through the generalization of psychophysical laws
Intertemporal decision making involves choices among options whose effects occur at different moments. These choices are influenced not only by the effect of rewards value perception at different moments, but also by the time perception effect. One of the main difficulties that affect standard experiments involving intertemporal choices is the simultaneity of both effects on time discounting. I...
متن کاملAssessing a 2-System Model of Quasi-Hyperbolic Temporal Discounting
People make intertemporal choices, decisions regarding costs and benefits at different points in time, as a matter of routine. Such choices range from mundane decisions, like when to set one’s alarm clock, to critical decisions, like whether or not to invest in retirement plans or health insurance. Beyond individuals’ decisions, nations must also make intertemporal choices when charting courses...
متن کامل