A Stream of Prospects or a Prospect of Streams: On the Evaluation of Intertemporal Risks

James Andreoni, Paul Feldman and Charles Sprenger

No 24075, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent debate has identified important gaps in the understanding of intertemporal risks. Critical to closing these gaps is evidence on which dimension of intertemporal risk – the risk or the time – is evaluated first. Though under discounted expected utility this ordering is of no consequence, under discounted non-expected utility models the order of evaluation is critical. We provide experimental tests in which different orderings of evaluation generate different predictions for behavior. We find more support for the notion that the risk dimension is evaluated first.

JEL-codes: C91 D81 D91 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-exp and nep-upt
Note: PE
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