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

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

doi:https://doi.org/10.1016/j.econlet.2013.01.001

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

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

Ben-Gurion University of the Negev

Research output: Contribution to journal › Article › peer-review

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 language	English
Pages (from-to)	512-514
Number of pages	3
Journal	Economics Letters
Volume	118
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2013.01.001
State	Published - 1 Mar 2013

Keywords

Risk
SDR
Time-preference
WTP

All Science Journal Classification (ASJC) codes

Finance
Economics and Econometrics

Access to Document

https://doi.org/10.1016/j.econlet.2013.01.001

Cite this

@article{9fffd3b6292c46298eb4196dba9217ea,

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

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.",

keywords = "Risk, SDR, Time-preference, WTP",

author = "Tal Shavit and Uri Benzion and Shapir, {Offer Moshe} and Koresh Galil",

year = "2013",

month = mar,

day = "1",

doi = "https://doi.org/10.1016/j.econlet.2013.01.001",

language = "الإنجليزيّة",

volume = "118",

pages = "512--514",

journal = "Economics Letters",

issn = "0165-1765",