Strotz Meets Allais: Diminishing Impatience and the Certainty Effect

S-Tier
Journal: American Economic Review
Year: 2008
Volume: 98
Issue: 3
Pages: 1145-62

Score contribution per author:

8.043 = (α=2.01 / 1 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Decision makers tend to exhibit a higher degree of impatience when considering a delay to an immediate reward than when contemplating an identical delay to an equal future reward. This work argues that diminishing impatience originates from the distinction between the certain present and the risky future. A simple functional representation of preferences, exhibiting time inconsistency when the future is uncertain, is derived. Experimental evidence, which is inconsistent with other formulations that account for diminishing impatience, supports the proposed approach. The new theory uncovers a tight relation between diminishing impatience and well-known behavioral regularities in choice under risk and uncertainty.

Technical Details

RePEc Handle
repec:aea:aecrev:v:98:y:2008:i:3:p:1145-62
Journal Field
General
Author Count
1
Added to Database
2026-01-25