Sign-dependence in intertemporal choice

Mohammed Abdellaoui, Han Bleichrodt and Olivier l’Haridon ()
Authors registered in the RePEc Author Service: Olivier L'Haridon

Journal of Risk and Uncertainty, 2013, vol. 47, issue 3, 225-253

Abstract: Allowing for sign-dependence in discounting substantially improves the description of people’s time preferences. The deviations from constant discounting that we observed were more pronounced for losses than for gains. Our data also suggest that the discount function should be flexible enough to allow for increasing impatience. These findings challenge the current practice in modeling intertemporal choice where sign-dependence is largely ignored and only decreasing impatience is allowed. Overall, the sign-dependent model of Loewenstein and Prelec ( 1992 ) with the constant sensitivity discount function of Ebert and Prelec ( 2007 ) provided the best fit to our data. Copyright Springer Science+Business Media New York 2013

Keywords: Intertemporal choice; sign-dependence; increasing impatience; D90 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (32)

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DOI: 10.1007/s11166-013-9181-9

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