Are time preferences for risky outcomes, riskless outcomes and commodities really different?

Tal Shavit, Uri Benzion, Offer Moshe Shapir, Koresh Galil

Research output: Contribution to journalArticlepeer-review

10 Scopus citations

Abstract

This paper suggests that part of the implied time Subjective Discount Rate (SDR) collected by Willingness To Pay (WTP) is an immediate premium. We offer a theoretical and experimental analysis of the gross SDR, which consists of the immediate premium and the net SDR (i.e., SDR less the immediate premium). We find that the net SDR for an assured monetary payment is no different than the SDR for a lottery or USB stick. However, the gross SDR for the assured outcome is higher than the SDR for a lottery or the USB stick.

Original languageEnglish
Pages (from-to)512-514
Number of pages3
JournalEconomics Letters
Volume118
Issue number3
DOIs
StatePublished - Mar 2013
Externally publishedYes

Keywords

  • Risk
  • SDR
  • Time-preference
  • WTP

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