Intertemporal choice under timing risk: An experimental approach

Autor:	Ayse Onculer, Selcuk Onay
Rok vydání:	2007
Předmět:	Economics and Econometrics Actuarial science Injury control Accident prevention Risk aversion Accounting Economics Probabilistic logic Poison control Intertemporal choice Finance Realization (probability) Expected utility hypothesis
Zdroj:	Journal of Risk and Uncertainty. 34:99-121
ISSN:	1573-0476 0895-5646
Popis:	This paper investigates how individuals evaluate delayed outcomes with risky realization times. Under the discounted expected utility (DEU) model, such evaluations depend only on intertemporal preferences. We obtain several testable hypotheses using the DEU model as a benchmark and test these hypotheses in three experiments. In general, our results show that the DEU model is a poor predictor of intertemporal choice behavior under timing risk. We found that individuals are averse to timing risk and that they evaluate timing lotteries in a rank-dependent fashion. The main driver of timing risk aversion is nothing but probabilistic risk aversion that stems from the nonlinear treatment of probabilities.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::5c370ceb661a5aa9dccf77f783c65459 https://doi.org/10.1007/s11166-007-9005-x Zobrazit plný text záznamu Plný text ve formátu PDF