A Vague Theory of Choice over Time

Paola Manzini and Marco Mariotti
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Paola Manzini: Queen Mary, University of London
Marco Mariotti: Queen Mary, University of London

The B.E. Journal of Theoretical Economics, 2006, vol. advances.6, issue 1

Abstract: We propose a novel approach to modelling time preferences, based on a cognitive shortcoming of human decision makers: the perception of future events becomes increasingly `blurred' as the events are pushed further in time. Our model explains behavioural `anomalies' such as preference reversal and cyclical choice.

Keywords: time preferences; hyperbolic discounting; preference reversal; cycles; intransitive preferences (search for similar items in EconPapers)
JEL-codes: A12 C70 D90 (search for similar items in EconPapers)
Date: 2006

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Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejtec:v:advances.6:y:2006:i:1:n:6

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