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dc.contributor.author
Fehr-Duda, Helga
dc.contributor.author
Epper, Thomas
dc.date.accessioned
2017-06-11T01:47:09Z
dc.date.available
2017-06-11T01:47:09Z
dc.date.issued
2013
dc.identifier.uri
http://hdl.handle.net/20.500.11850/76588
dc.description.abstract
A key claim in a recent paper by Andreoni and Sprenger (2012b) (AS) is that their evidence on intertemporal risk taking behavior is not only at odds with classical discounted expected utility theory but also with rank-dependent models involving probability weighting, such as rank-dependent utility and cumulative prospect theory. AS argue in favor of utility differing over the domains of certainty and uncertainty (“u-v” model). Here we show that, contrary to their claim, rank-dependent models provide a unified account for their data on subjects’ budget allocations to portfolios of sooner and later payments. Moreover, the u-v model cannot explain recent evidence that intertemporal risk taking varies significantly with the presence of hedging opportunities, while rank-dependent models can explain these findings. Thus, rank-dependent models provide not only an explanation for the evidence in AS but also for evidence that contradicts the u-v model.
dc.language.iso
en
dc.publisher
ETH Zürich
dc.title
Balancing on a Budget Line
dc.type
Working Paper
ethz.title.subtitle
Comment on Andreoni and Sprenger’s “Risk Preferences Are Not Time Preferences”
ethz.size
27 p.
ethz.publication.place
Zürich
ethz.publication.status
published
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.::03361 - Schubert, Renate (emeritus) / Schubert, Renate (emeritus)
ethz.leitzahl.certified
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02045 - Dep. Geistes-, Sozial- u. Staatswiss. / Dep. of Humanities, Social and Pol.Sc.::03361 - Schubert, Renate (emeritus) / Schubert, Renate (emeritus)
ethz.date.deposited
2017-06-11T01:47:48Z
ethz.source
ECIT
ethz.identifier.importid
imp593651593f58842602
ethz.ecitpid
pub:120932
ethz.eth
yes
ethz.availability
Metadata only
ethz.rosetta.installDate
2017-07-13T10:42:58Z
ethz.rosetta.lastUpdated
2021-02-14T11:04:33Z
ethz.rosetta.versionExported
true
ethz.COinS
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