...top of page

Working paper 633

Anujit Chakraborty, Yoram Halevy, Kota Saito, "The Relation between Behavior under Risk and over Time", 2019-03-31
Main Text (application/pdf) (524,338 bytes)

Abstract: The paper establishes a tight relation between non-standard behaviors in the domains of risk and time, by considering a decision maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present biased temporal behavior, and between the common ratio effect and temporal reversals related to the common difference effect.

Keywords: time consistency, hyperbolic discounting, non-expected utility, present bias, implicit risk.

JEL Classification: D01, D81, D91