Economics at your fingertips  

Measuring preferences over the temporal resolution of consumption uncertainty

Thomas Meissner and Philipp Pfeiffer

Journal of Economic Theory, 2022, vol. 200, issue C

Abstract: Timing premia measure how much consumption people are willing to forgo to resolve all consumption uncertainty immediately. We develop a novel experiment to elicit these attitudes directly in a model-free way. On average, subjects forgo around 5% of their total consumption to resolve all uncertainty immediately. Recursive utility models postulate a structural link between timing premia and deep preference parameters. We elicit these preference parameters separately and estimate corresponding predicted timing premia. Comparing directly elicited and predicted timing premia allows us to test this structural link. Surprisingly, we find a negative correlation between predicted and elicited timing premia.

Keywords: Recursive utility; Timing of resolution of uncertainty; Preference elicitation; Timing premia; Risk and time preferences (search for similar items in EconPapers)
JEL-codes: C91 E24 E44 G12 O40 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.1016/j.jet.2021.105379

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

Page updated 2022-09-11
Handle: RePEc:eee:jetheo:v:200:y:2022:i:c:s0022053121001964