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Eliciting Prospect Theory When Consequences Are Measured in Time Units: “Time Is Not Money”

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  • Mohammed Abdellaoui

    (HEC Paris and GREGHEC-CNRS, 78351 Jouy en Josas, Cedex, France)

  • Emmanuel Kemel

    (University Paris I, CES, 75013 Paris; and CETE de l'Ouest, 44262 Nantes, France)

Abstract

We elicited the prospect theory components (utility, probability weighting, and loss aversion) when consequences are expressed as the time dedicated to a specific task or activity. A similar elicitation was performed for monetary consequences to allow an across-attribute (time/money) comparison of the elicited components (at the individual level). We obtained less concave utility and smaller loss aversion for time than for money. Moreover, while the probability weighting was predominantly inverse S -shaped for both attributes, it was less sensitive to probabilities and more elevated for time than for money. This finding implies more optimism for gains and more pessimism for losses. This paper was accepted by Peter Wakker, decision analysis.

Suggested Citation

  • Mohammed Abdellaoui & Emmanuel Kemel, 2014. "Eliciting Prospect Theory When Consequences Are Measured in Time Units: “Time Is Not Money”," Management Science, INFORMS, vol. 60(7), pages 1844-1859, July.
    • Handle: RePEc:inm:ormnsc:v:60:y:2014:i:7:p:1844-1859
    DOI: 10.1287/mnsc.2013.1829
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