New paradoxes in intertemporal choice

Li-Lin Rao and Shu Li

Judgment and Decision Making, 2011, vol. 6, issue 2, pages 122-129

Abstract: Similar to research on risky choice, the traditional analysis of intertemporal choice takes the view that an individual behaves so as to maximize the discounted sum of all future utilities. The well-known Allais paradox contradicts the fundamental postulates of maximizing the expected value or utility of a risky option. We describe a violation of the law of diminishing marginal utility as well as an intertemporal version of the Allais paradox.

Keywords: intertemporal choice; risky choice; cancellation. (search for similar items in EconPapers)
Date: 2011
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Persistent link: http://EconPapers.repec.org/RePEc:jdm:journl:v:6:y:2011:i:2:p:122-129

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