Are time preferences for risky outcomes, riskless outcomes and commodities really different?
Tal Shavit (),
Offer Moshe Shapir and
Koresh Galil ()
Economics Letters, 2013, vol. 118, issue 3, 512-514
This paper suggests that part of the implied time Subjective Discount Rate (SDR) collected by Willingness To Pay (WTP) is an immediate premium. We offer a theoretical and experimental analysis of the gross SDR, which consists of the immediate premium and the net SDR (i.e., SDR less the immediate premium). We find that the net SDR for an assured monetary payment is no different than the SDR for a lottery or USB stick. However, the gross SDR for the assured outcome is higher than the SDR for a lottery or the USB stick.
Keywords: Time-preference; Risk; WTP; SDR (search for similar items in EconPapers)
JEL-codes: C91 E43 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:3:p:512-514
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