Lifetime Uncertainty and Time Preference
Nicolas Drouhin ()
Theory and Decision, 2001, vol. 51, issue 2, 145-172
Despite Fisher's (1930) psychological intuitions of and the formal treatment given by Yaari (1965, Review of Economic Studies 32, 137), the intertemporal model of choice is mainly a model with certain lifetime. The purpose of this paper is to reconsider this assumption, starting from a very simple two-period model of choice with lifetime uncertainty. We examine the comparative statics of the model at the first two orders and replace the concept of `pure time preference' by taking into account the subjective treatment of the probability of survival. Copyright Kluwer Academic Publishers 2001
Keywords: Intertemporal choice; Lifetime uncertainty; Rank dependent utility (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:51:y:2001:i:2:p:145-172
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