The Relation between Behavior under Risk and over Time
Yoram Halevy () and
Working Papers from University of Toronto, Department of Economics
The paper establishes a tight relation between non-standard behaviors in the domains of risk and time, by considering a decision maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present biased temporal behavior, and between the common ratio effect and temporal reversals related to the common difference effect.
Keywords: time consistency; hyperbolic discounting; non-expected utility; present bias; implicit risk. (search for similar items in EconPapers)
JEL-codes: D01 D81 D91 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-mic, nep-rmg and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:tor:tecipa:tecipa-633
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