A Note On The Loewenstein-Prelec Theory Of Intertemporal Choice

Ali al-Nowaihi () and Sanjit Dhami

No 05/18, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: In one of the major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time. We correct a number of errors in Loewenstein and Prelec (1992). Furthermore, we provide a correct, more direct and simpler derivation of their generalized hyperbolic discounting formula that has formed the basis of much recent work on temporal choice.

Keywords: Anomalies of the DU model; Intertemporal choice; Generalized hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: C60 D91 (search for similar items in EconPapers)
Date: 2005-07
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Journal Article: A note on the Loewenstein-Prelec theory of intertemporal choice (2006)
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