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A Vague Theory of Choice over Time
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Paola Manzini
and Marco Mariotti
Published/Copyright:
October 16, 2006
We propose a novel approach to modelling time preferences, based on a cognitive shortcoming of human decision makers: the perception of future events becomes increasingly `blurred' as the events are pushed further in time. Our model explains behavioural `anomalies' such as preference reversal and cyclical choice.
Keywords: time preferences; hyperbolic discounting; preference reversal; cycles; intransitive preferences
Published Online: 2006-10-16
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Keywords for this article
time preferences;
hyperbolic discounting;
preference reversal;
cycles;
intransitive preferences
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- Contributions Article
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- Liars and Inspectors: Optimal Financial Contracts When Monitoring is Non-Observable
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