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Risk Preferences Are Not Time Preferences: On the Elicitation of Time Preference under Conditions of Risk: Comment*

* This paper is a replication of an original study

Author

Listed:
  • Stephen L. Cheung

Abstract

Andreoni and Sprenger (2012a, b) report evidence that distinct utility functions govern choices under certainty and risk. I investigate the robustness of this result to the experimental design. I find that the effect disappears completely when a multiple price list instrument is used instead of a convex time budget design. Alternatively, the effect is reduced by half when sooner and later payment risks are realized using a single lottery instead of two independent lotteries. The result is thus at least partially driven by intertemporal diversification, supporting an explanation in terms of concavity of the intertemporal, and not only atemporal, utility function. (JEL C91, D81, D91)

Suggested Citation

  • Stephen L. Cheung, 2015. "Risk Preferences Are Not Time Preferences: On the Elicitation of Time Preference under Conditions of Risk: Comment," American Economic Review, American Economic Association, vol. 105(7), pages 2242-2260, July.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:7:p:2242-60
    Note: DOI: 10.1257/aer.20120946
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    Replication

    This item is a replication of:
  • James Andreoni & Charles Sprenger, 2012. "Risk Preferences Are Not Time Preferences," American Economic Review, American Economic Association, vol. 102(7), pages 3357-3376, December.

    • More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Risk Preferences Are Not Time Preferences: On the Elicitation of Time Preference under Conditions of Risk: Comment (AER 2015) in ReplicationWiki

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