From Decision in Risk to Decision in Time - and Return: A Restatement of Probability Discounting
| Autor: | Marc-Arthur Diaye, André Lapidus, Christian Schmidt |
|---|---|
| Přispěvatelé: | Centre d'économie de la Sorbonne (CES), Université Paris 1 Panthéon-Sorbonne (UP1)-Centre National de la Recherche Scientifique (CNRS), Philosophie, Histoire et Analyse des Représentations Économiques (PHARE), Université Paris 1 Panthéon-Sorbonne (UP1), Lapidus, André |
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Probability discounting
rationality rank-dependent utility attitude toward probabilities JEL: D - Microeconomics/D.D8 - Information Knowledge and Uncertainty/D.D8.D81 - Criteria for Decision-Making under Risk and Uncertainty logarithmic time perception attitude toward risk [SHS.ECO] Humanities and Social Sciences/Economics and Finance [SHS.ECO]Humanities and Social Sciences/Economics and Finance JEL: D - Microeconomics/D.D9 - Intertemporal Choice/D.D9.D91 - Intertemporal Household Choice • Life Cycle Models and Saving JEL: D - Microeconomics/D.D1 - Household Behavior and Family Economics time discounting |
| Zdroj: | HAL |
| Popis: | This paper aims at restating, in a decision theory framework, the results of some signicant contributions of the literature on probability discounting that followed the publication of the pioneering article by Rachlin et al. (1991). We provide a restatement of probability discounting in terms of rank-dependent utility, in which the utilities of the outcomes of n-issues lotteries are weighted by probabilities transformed after their transposition into time-delays. This formalism makes the typical cases of rationality in time and in risk mutually exclusive, but allows looser types of rationality. The resulting attitude toward probability and toward risk are then determined in relation to the values of the two parameters involved in the procedure of probability discounting. |
| Databáze: | OpenAIRE |
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