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The preference to receive benefits as early as possible and delay costs as much as possible is natural for people. That means a positive discount rate in the intertemporal choice, which is a common assumption in economics. However, as research in behavioral economics proves, in certain...
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In this paper, we establish an axiomatically founded generalized recursive smooth ambiguity model that allows for a … separation among intertemporal substitution, risk aversion, and ambiguity aversion. We axiomatize this model using two approaches … Seo (2009). We characterize risk attitude and ambiguity attitude within these two approaches. We then discuss our model …
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