Corrigendum to "A note on the Loewenstein-Prelec theory of intertemporal choice" [Math. Social Sci. 52 (1) (2006) 99-108]

Ali al-Nowaihi () and Sanjit Dhami

Mathematical Social Sciences, 2008, vol. 56, issue 1, 144-147

Abstract: In a critique of the Loewenstein and Prelec [Loewenstein G., Prelec D., 1992. Anomalies in intertemporal choice: Evidence and an interpretation. The Quarterly Journal of Economics 107, 573-597] theory of intertemporal choice, [al-Nowaihi, A., Dhami, S., 2006. A note on the Loewenstein-Prelec theory of intertemporal choice. Mathematical Social Sciences 52, 99-108] point out four errors. One of the alleged errors was that the elasticity of the value function in prospect theory is decreasing. But it is in fact increasing. We provide a correction and a formal proof. As a corollary, we show that the elasticity of the value function is bounded between zero and one. Nevertheless, all the remaining points in [al-Nowaihi, A., Dhami, S., 2006. A note on the Loewenstein-Prelec theory of intertemporal choice. Mathematical Social Sciences 52, 99-108] remain valid

Date: 2008
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