A Vague Theory of Choice over Time

Paola Manzini and Marco Mariotti

No 1228, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We propose a novel approach to modelling time preferences, based on a cognitive shortcoming of human decision makers: the perception of future events becomes increasingly ‘blurred’ as the events are pushed further in time. We axiomatise a class of preference representations which can be specialised to rationalise ‘anomalies’ such as preference reversals and cyclical preferences. We also present an application to a form of time inconsistency which we dub ‘the now or never fallacy’.

Keywords: hyperbolic discounting; time preferences; intransitive preferences; preference reversal; cycles (search for similar items in EconPapers)
JEL-codes: A12 C70 D90 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2004-07
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-mic
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Published - published in:B.E. Journal of Theoretical Economics: Advances in Theoretical Economics , 2006, 6 (1), 1265-1265

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Journal Article: A Vague Theory of Choice over Time (2006)
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