Characterization of variation averse preferences by present value

Umut Keskin

Economics Letters, 2020, vol. 196, issue C

Abstract: This paper uses Gilboa’s (1989) variation aversion model to examine additive separability in intertemporal decision models. We present a characterization of this model using present values and based on this characterization, we argue that additive separability may not necessarily be rational in some settings. Our method also has the advantage that it allows for testing models by using econometric techniques.

Keywords: Present value; Intertemporal choice; Discounted utility; Variation aversion (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:196:y:2020:i:c:s0165176520303414

DOI: 10.1016/j.econlet.2020.109561

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