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Intertemporal choice is the study of the relative value people assign to two or more payoffs at different points in time. This relationship is usually simplified to today and some future date. Intertemporal choice was introduced by John Rae in 1834 in the "Sociological Theory of Capital".
- 1. Introduction
- Present-focused Preferences: Theoretical Commonalities
- 3. Empirical Regularities and Open Puzzles
- Open Question #2: How substitutable is consumption (and effort) across time? How does the substitution of consumption affect measured discount rates?
Most decisions have consequences that play out over time. How much should I spend today and how much should I save? How many hours should I work on a problem set tonight and what work should I postpone? Should I have a candid conversation with an under-performing co-worker or delay the awkward interaction? Is it worth getting out of bed to take m...
All animals, including humans, tend to pursue instant gratification, even when such immediate rewards are obtained by foregoing a substantially larger amount of delayed gratification. In section 3, we discuss both the qualitative and quantitative evidence (from the field and the lab) for this empirical regularity. In the current section, we descr...
We turn now to a series of well-established empirical regularities, each of which is also associated with some important open questions. Additionally, we identify a number of additional open questions for future research.
Real rewards appear promising because they deliver incremental utility flows at a given time; moreover discounting of real rewards appears different than discounting of money receipt. Yet, in theory, consumption studies can introduce similar confounds: individuals can change consumption in other areas of life to offset experimentally induced consum...
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Aug 17, 2021 · This paper reviews the existing literature on the intertemporal choice from a methodological perspective. After a summary of the neoclassical model with its inaccuracies and controversies, the paper introduces the concept of present bias presented through time...
- Marco Lafratta
- marco.lafratta@studenti.unich.it
- 2020
Intertemporal portfolio choice is the process of allocating one's investable wealth to various assets, especially financial assets, repeatedly over time, in such a way as to optimize some criterion. The set of asset proportions at any time defines a portfolio.
Mar 1, 2021 · Key Takeaways. Intertemporal choice refers to decisions, such as spending habits, made in the near-term that can affect future financial opportunities. Theoretically, by not consuming today,...
- Daniel Liberto
Apr 16, 2021 · Intertemporal choice involves deciding between smaller, sooner and larger, later rewards. People tend to prefer smaller rewards that are available earlier to larger rewards available later, a phenomenon referred to as temporal or delay discounting.
intertemporal choice 70 Intertemporal choices – decisions with consequences that play out over time – are important and ubiquitous. Decisions about spending, investments, diet, relationships, fertility, crime and education all contain intertemporal tradeoffs. In this paper, we discuss interrelated
