A Stream of Prospects or a Prospect of Streams: On the Evaluation of Intertemporal Risks

54 Pages Posted: 6 Dec 2017 Last revised: 13 Oct 2024

See all articles by James Andreoni

James Andreoni

University of California, San Diego (UCSD)

Paul Feldman

Texas A&M University

Charles Sprenger

University of California, San Diego (UCSD)

Date Written: November 2017

Abstract

Recent debate has identified important gaps in the understanding of intertemporal risks. Critical to closing these gaps is evidence on which dimension of intertemporal risk – the risk or the time – is evaluated first. Though under discounted expected utility this ordering is of no consequence, under discounted non-expected utility models the order of evaluation is critical. We provide experimental tests in which different orderings of evaluation generate different predictions for behavior. We find more support for the notion that the risk dimension is evaluated first.

Suggested Citation

Andreoni, James and Feldman, Paul and Sprenger, Charles, A Stream of Prospects or a Prospect of Streams: On the Evaluation of Intertemporal Risks (November 2017). NBER Working Paper No. w24075, Available at SSRN: https://ssrn.com/abstract=3082256

James Andreoni (Contact Author)

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

HOME PAGE: http://econ.ucsd.edu/~jandreon/

Paul Feldman

Texas A&M University ( email )

College Station, TX 77843
United States

HOME PAGE: http://https://sites.google.com/view/pfeldman

Charles Sprenger

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

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