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Once Upon a Time Preference - How Rationality and Risk Aversion Change the Rationale for Discounting
Traeger, Christian - CESifo - 2012
that are imposed in the evaluation of uncertain scenarios. Imposing all rationality constraints jointly eliminates pure …
Persistent link: https://www.econbiz.de/10010544183
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Accounting for Different Uncertainties: Implications for Climate Investments?
Hector, Svenja - Fondazione ENI Enrico Mattei (FEEM) - 2013
The paper clarifies the link between changes in risk aversion and the effect on the consumption discount rate. In a general framework that can cope with various forms of uncertainty, it is shown that the response of the consumption discount rate to a change in risk aversion depends on some...
Persistent link: https://www.econbiz.de/10010904906
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The Income Effect under Uncertainty: a Slutsky-Like Decomposition with Risk Aversion
Antoniadou, Elena; Mirman, Leonard J.; Santugini, Marc - Centre Interuniversitaire sur le Risque, les Politiques … - 2013
We study the effect of changing income on optimal decisions in the multidimensional expected utility framework with strongly separable preferences. Using the Kihlstrom and Mirman (1974) (KM) utility representation, we show that the effect of changing income can be decomposed into a modified...
Persistent link: https://www.econbiz.de/10010728904
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The Long-Run Discount Rate Controversy
Gollier, Christian; Hammitt, James K. - In: Annual Review of Resource Economics 6 (2014) 1, pp. 273-295
The choice of the rate at which one should discount the long-term benefits of mitigating climate change is highly controversial. Both the level and the slope of the term structure of discount rates have been discussed intensively in relation to the determination of the social cost of carbon....
Persistent link: https://www.econbiz.de/10010951575
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Is There a Development Gap in Rationality?
Cappelen, Alexander W.; Kariv, Shachar; Sørensen, Erik Ø. - Institutt for samfunnsøkonomi, Norges Handelshøyskole … - 2014
We report an experimental test of the four touchstones of rationality in choice under risk – utility maximization … political affairs. We find very small or no significant differences between the two samples in the degree of rationality … economic rationality. We show that a canonical IQ test indicates a much larger development gap in rationality relative to our …
Persistent link: https://www.econbiz.de/10010818866
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Heterogeneous Beliefs in a Continuous-Time Model
Hara, Chiaki - Institute of Economic Research, Kyoto University - 2010
In an exchange economy under uncertainty populated by consumers having constant and equal relative risk aversion but heterogeneous probabilistic beliefs, we analyze the nature of the representative consumer's probabilistic belief and discount rates. We prove a formula that implies that the...
Persistent link: https://www.econbiz.de/10008488927
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Mortality and Life-Cycle Models
Bommier, Antoine - Laboratoire d'Economie Appliquee, INRA - 2003
I compare two different ways of integrating mortality into life-cycle models: the standard additive model with time preferences, on the one hand, and a formulation that rules out the existence of time preference, but allows for risk aversion with respect to the length of life, on the other hand....
Persistent link: https://www.econbiz.de/10005091138
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A Measure of Rationality and Welfare
Apesteguia, Jose; Ballester, Miguel Angel - Barcelona Graduate School of Economics (Barcelona GSE) - 2014
Evidence showing that individual behavior often deviates from the classical principle of preference maximization has raised at least two important questions: (i) How serious are the deviations? and (ii) What is the best way to analyse choice behavior in order to extract information for the...
Persistent link: https://www.econbiz.de/10011255331
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A Measure of Rationality and Welfare
Apesteguia, Jose; Ballester, Miguel Angel - Barcelona Graduate School of Economics (Barcelona GSE) - 2010
these two questions by proposing a set of foundational conditions on which to build a proper measure of the rationality of … preference data. In our first result, we show that there is a unique measure of rationality that satisfies all of the proposed …
Persistent link: https://www.econbiz.de/10010547512
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La valeur psychologique du temps : Une synthèse de la littérature
Pratlong, Florent; de La Bruslerie, Hubert - Université Paris-Dauphine (Paris IX) - 2012
prospect theory, considering that perceived utility of the agent alters the structure of their psychological value of time. The …
Persistent link: https://www.econbiz.de/10010742289