Risk Preferences Are Not Time Preferences: Separating Risk and Time Preference: Comment

Bin Miao and Songfa Zhong

American Economic Review, 2015, vol. 105, issue 7, 2272-86

Abstract: Andreoni and Sprenger (2012a,b) observe that utility functions are distinct for risk and time preferences, and show that their findings are consistent with a preference for certainty. We revisit this question in an enriched experimental setting in which subjects make intertemporal decisions under different risk conditions. The observed choice behavior supports a separation between risk attitude and intertemporal substitution rather than a preference for certainty. We further show that several models, including Epstein and Zin (1989); Chew and Epstein (1990); and Halevy (2008) exhibit such a separation and can account for the overall experimental findings. (JEL C91, D81, D91)

JEL-codes: C91 D81 D91 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20131183
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Citations: View citations in EconPapers (44)

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