Time-Consistent Optimal Stopping

4 Pages Posted: 8 May 1997

See all articles by Lones Smith

Lones Smith

University of Wisconsin at Madison - Department of Economics

Date Written: March 17, 1997

Abstract

This paper investigates time consistent preferences where the strategy space consists of a stopping time, and the decision-maker also acts under uncertainty. Despite the requirement of identical vNM preferences, it is shown that in addition to the exponential discounting class identified by Strotz (1956), negative ane discounting also yields time consistent behavior.

JEL Classification: C44

Suggested Citation

Smith, Lones, Time-Consistent Optimal Stopping (March 17, 1997). Available at SSRN: https://ssrn.com/abstract=56256 or http://dx.doi.org/10.2139/ssrn.56256

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