Abstract
The paper establishes a tight relation between nonstandard 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 bias, and between the common ratio effect and temporal reversals.
Original language | American English |
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Pages (from-to) | 1-16 |
Number of pages | 16 |
Journal | American Economic Review: Insights |
Volume | 2 |
Issue number | 1 |
DOIs | |
State | Published - 2020 |