Modeling Interactions between Risk, Time, and Social Preferences

Mark Schneider ()
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Mark Schneider: University of Alabama

Working Papers from Chapman University, Economic Science Institute

Abstract: Recent studies have observed systematic interactions between risk, time, and social preferences that constitute violations of `dimensional independence' and are not explained by the leading models of decision making. This note provides a simple approach to modeling such interaction eects while predicting new ones. In particular, we present a model of rational-behavioral preferences that takes the convex combination of `behavioral' System 1 preferences and `rational' System 2 preferences. The model provides a unifying approach to analyzing risk, time, and social preferences, and predicts how these preferences are correlated with reliance on System 1 or System 2 thinking.

Keywords: Risk; Time; Social preference; System 1; System 2 (search for similar items in EconPapers)
JEL-codes: D90 D91 (search for similar items in EconPapers)
Date: 2018
New Economics Papers: this item is included in nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:18-19

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