New paradoxes in intertemporal choice
AbstractSimilar to research on risky choice, the traditional analysis of intertemporal choice takes the view that an individual behaves so as to maximize the discounted sum of all future utilities. The well-known Allais paradox contradicts the fundamental postulates of maximizing the expected value or utility of a risky option. We describe a violation of the law of diminishing marginal utility as well as an intertemporal version of the Allais paradox.
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Bibliographic InfoArticle provided by Society for Judgment and Decision Making in its journal Judgment and Decision Making.
Volume (Year): 6 (2011)
Issue (Month): 2 (February)
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intertemporal choice; risky choice; cancellation.;
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- Carlin, Paul S., 1996. "Can the maximization principle be discarded? A comment," Journal of Economic Behavior & Organization, Elsevier, vol. 29(2), pages 351-353, March.
- Bethany J. Weber & Wah Pheow Tan, 2012. "Ambiguity aversion in a delay analogue of the Ellsberg Paradox," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(4), pages 383-389, July.
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