Discounted Utility and Present Value-A Close Relation

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dc.authoridRohde, Kirsten/0000-0002-0222-7474
dc.authorwosidRohde, Kirsten/C-2823-2018
dc.contributor.authorBleichrodt, Han
dc.contributor.authorKeskin, Umut
dc.contributor.authorRohde, Kirsten I. M.
dc.contributor.authorSpinu, Vitalie
dc.contributor.authorWakker, Peter
dc.date.accessioned2024-07-18T20:49:04Z
dc.date.available2024-07-18T20:49:04Z
dc.date.issued2015
dc.departmentİstanbul Bilgi Üniversitesien_US
dc.description.abstractWe introduce a new type of preference condition for intertemporal choice, which requires present values to be independent of various other variables. The new conditions are more concise and more transparent than traditional ones. They are directly related to applications because present values are widely used tools in intertemporal choice. Our conditions give more general behavioral axiomatizations, which facilitate normative debates and empirical tests of time inconsistencies and related phenomena. Like other preference conditions, our conditions can be tested qualitatively. Unlike other preference conditions, our conditions can also be directly tested quantitatively, and we can verify the required independence of present values from predictors in regressions. We show how similar types of preference conditions, imposing independence conditions between directly observable quantities, can be developed for decision contexts other than intertemporal choice and can simplify behavioral axiomatizations there. Our preference conditions are especially efficient if several types of aggregation are relevant because we can handle them in one stroke. We thus give an efficient axiomatization of a market pricing system that is (i) arbitrage-free for hedging uncertainties and (ii) time consistent.en_US
dc.identifier.doi10.1287/opre.2015.1433
dc.identifier.endpage1430en_US
dc.identifier.issn0030-364X
dc.identifier.issue6en_US
dc.identifier.scopus2-s2.0-84955072773en_US
dc.identifier.scopusqualityQ1en_US
dc.identifier.startpage1420en_US
dc.identifier.urihttps://doi.org/10.1287/opre.2015.1433
dc.identifier.urihttps://hdl.handle.net/11411/8063
dc.identifier.volume63en_US
dc.identifier.wosWOS:000367833500013en_US
dc.identifier.wosqualityQ2en_US
dc.indekslendigikaynakWeb of Scienceen_US
dc.indekslendigikaynakScopusen_US
dc.language.isoenen_US
dc.publisherInformsen_US
dc.relation.ispartofOperations Researchen_US
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanıen_US
dc.rightsinfo:eu-repo/semantics/closedAccessen_US
dc.subjectİntertemporal Optimizationen_US
dc.subjectPresent Valueen_US
dc.subjectDiscounted Utilityen_US
dc.subjectTime İnconsistencyen_US
dc.subjectArbitrage-Freeen_US
dc.subjectPreference Axiomatizationen_US
dc.subjectDecision Analysis: Sequentialen_US
dc.subjectUtility: Multi-Attributeen_US
dc.subjectMathematics: Functionsen_US
dc.subjectExpected Utilityen_US
dc.subjectDecision-Makingen_US
dc.subjectTime Preferenceen_US
dc.subjectStreamsen_US
dc.subjectChoiceen_US
dc.subjectTestsen_US
dc.titleDiscounted Utility and Present Value-A Close Relationen_US
dc.typeArticleen_US

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