1992/05/01 by George Loewenstein, Dražen Prelec · 2 citations
Economics, Econometrics and Finance · Decision Sciences · #Economic theories and models #Decision-Making and Behavioral Economics #Economic and Environmental Valuation #George (robot) #Interpretation (philosophy) #Economics #Positive economics #Classics #Philosophy #History #Art history #Linguistics
paper · doi:10.2307/2118482
openalex publication_date 1992/05/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/05
Research on decision making under uncertainly has been strongly influenced by the documentation of numerous expected utility (EU) anomalies—behaviors that violate the expected utility axioms. The relative lack of progress on the closely related topic of intertemporal choice is partly due to the absence of an analogous set of discounted utility (DU) anomalies. We enumerate a set of DU anomalies analogous to the EU anomalies and propose a model that accounts for the anomalies, as well as other intertemporal choice phenomena incompatible with DU. We discuss implications for savings behavior, estimation of discount rates, and choice framing effects.