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A vague theory of choice over time

Author

Listed:
  • Paola Manzini

    (Queen Mary, University of London and IZA)

  • Marco Mariotti

    (Queen Mary, University of London)

Abstract
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 reversals and cyclical choice.

Suggested Citation

  • Paola Manzini & Marco Mariotti, 2002. "A vague theory of choice over time," Game Theory and Information 0203004, University Library of Munich, Germany, revised 21 Jul 2005.
    • Handle: RePEc:wpa:wuwpga:0203004
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; figures: included
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Wong, Wei-Kang, 2008. "How much time-inconsistency is there and does it matter? Evidence on self-awareness, size, and effects," Journal of Economic Behavior & Organization, Elsevier, vol. 68(3-4), pages 645-656, December.
    2. Efe A Ok & Yusufcan Masatlioglu, 2003. "A General Theory of Time Preferences," Levine's Bibliography 234936000000000089, UCLA Department of Economics.
    3. Adriani, Fabrizio & Sonderegger, Silvia, 2020. "Optimal similarity judgments in intertemporal choice (and beyond)," Journal of Economic Theory, Elsevier, vol. 190(C).
    4. Paola Manzini & Marco Mariotti & Luigi Mittone, 2010. "Choosing monetary sequences: theory and experimental evidence," Theory and Decision, Springer, vol. 69(3), pages 327-354, September.
    5. Ali al-Nowaihi & Sanjit Dhami, 2013. "A Theory of Reference Time," Discussion Papers in Economics 13/26, Division of Economics, School of Business, University of Leicester.
    6. al-Nowaihi, Ali & Dhami, Sanjit, 2009. "A value function that explains the magnitude and sign effects," Economics Letters, Elsevier, vol. 105(3), pages 224-229, December.
    7. Boyarchenko, Svetlana & Levendorskii, Sergei, 2010. "Discounting when income is stochastic and climate change policies," MPRA Paper 27998, University Library of Munich, Germany.
    8. Ali al-Nowaihi & Sanjit Dhami, 2018. "Foundations for Intertemporal Choice," CESifo Working Paper Series 6913, CESifo.
    9. Manzini, Paola & Mariotti, Marco, 2007. "Choice Over Time," IZA Discussion Papers 2993, Institute of Labor Economics (IZA).
    10. Svetlana Boyarchenko & Sergei Levendorskii, 2005. "Discount factors ex post and ex ante, and discounted utility anomalies," Microeconomics 0510013, University Library of Munich, Germany, revised 13 Dec 2005.
    11. Manzini, Paola & Mariotti, Marco, 2004. "Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods," IZA Discussion Papers 1239, Institute of Labor Economics (IZA).
    12. Ali al-Nowaihi & Sanjit Dhami, 2021. "Preferences over Time and under Uncertainty: Theoretical Foundations," CESifo Working Paper Series 9215, CESifo.
    13. Fabrizio Adriani & Silvia Sonderegger, 2014. "Evolution of similarity judgements in intertemporal choice," Discussion Papers 2014-06, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    14. Paola Manzini & Marco Mariotti, 2004. "Rationalizing Boundedly Rational Choice," Microeconomics 0407005, University Library of Munich, Germany, revised 21 Dec 2005.

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    More about this item

    Keywords

    time preferences; hyperbolic discounting; preference reversal; cycles; intransitive preferences;
    All these keywords.

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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