The Relation between Behavior under Risk and over Time

Anujit Chakraborty, Yoram Halevy and Kota Saito

American Economic Review: Insights, 2020, vol. 2, issue 1, 1-16

Abstract: The paper establishes a tight relation between nonstandard behaviors in the domains of risk and time, by considering a decision-maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present bias, and between the common ratio effect and temporal reversals.

JEL-codes: D11 D15 D81 D91 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (13)

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Working Paper: The Relation between Behavior under Risk and over Time (2019)
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DOI: 10.1257/aeri.20190051

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