Viewing the Future through a Warped Lens: Why Uncertainty Generates Hyperbolic Discounting

Détails

ID Serval
serval:BIB_C38EBC8804A2
Type
Article: article d'un périodique ou d'un magazine.
Collection
Publications
Titre
Viewing the Future through a Warped Lens: Why Uncertainty Generates Hyperbolic Discounting
Périodique
Journal of Risk and Uncertainty
Auteur(s)
Epper T., Fehr-Duda H., Bruhin A.
ISSN
0895-5646
Statut éditorial
Publié
Date de publication
12/2011
Peer-reviewed
Oui
Volume
43
Numéro
3
Pages
169-203
Langue
anglais
Résumé
A large body of experimental research has demonstrated that, on average, people violate the axioms of expected utility theory as well as of discounted utility theory. In particular, aggregate behavior is best characterized by probability distortions and hyperbolic discounting. But is it the same people who are prone to these behaviors? Based on an experiment with salient monetary incentives we demonstrate that there is a strong and significant relationship between greater departures from linear probability weighting and the degree of decreasing discount rates at the level of individual behavior. We argue that this relationship can be rationalized by the uncertainty inherent in any future event, linking discounting behavior directly to risk preferences. Consequently, decreasing discount rates may be generated by people's proneness to probability distortions.
Mots-clé
time preferences, risk preferences, hyperbolic discounting, probability weighting, institutionally generated uncertainty
Web of science
Création de la notice
10/09/2012 10:59
Dernière modification de la notice
03/03/2018 21:12
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