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The endogeneity of time preference and analysis of collective behavior

Marianna Klochko

2015

( 24 )

DOI: 10.7206/DEC.1733-0092.63

https:/doi.org/10.7206/DEC.1733-0092.63

Abstract

This essay proposes that time preference is an essential component of analysis of collective behavior and provision of public goods. It addresses the validity of the assumption that time preference, as a parameter in individual utility functions, is exogenous and fi xed. While individual time discounting is used to predict many social phenomena, it is quite often applied in a fi xed form where the possibility of change is rarely discussed. The mechanism of change in individual time discounting is explored in different social contexts, using student, inmate and drug addict populations. This study establishes that certain parameters, such as the length of exposure to new environment and new social connections, are of extreme importance in determining the degree of change in time discounting.

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Conjoint Analysis As A Measurement Method Of Preferences For Delayed Lotteries – Research Announcement

Marcin Czupryna; Elżbieta Kubińska; Łukasz Markiewicz

2014

( 22 )

DOI: 10.7206/DEC.1733-0092.34

https:/doi.org/ 10.7206/DEC.1733-0092.34

Abstract

The major purpose of the paper is considering the possibility of using conjoint analysis in postponed lotteries research. The role of conjoint measurement theory in mathematical psychology is reviewed. Next, the conjoint data analysis method is elaborated; this method is derived from conjoint measurement theory and it is very popular in market research. The focus is on two versions: traditional Conjoint Value Analysis (CVA) and Choice-Based Conjoint (CBC). The results of this research show that changes in the scope of the likelihood of payment, rather than changes in the dimension of deferral, more strongly determine the choices made.

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The Effect Of Delay On Risk Tolerance And Probability Weights

Katarzyna Idzikowska; Tadeusz Tyszka; Marcin Palenik

2016

( 26 )

DOI: 10.7206/DEC.1733-0092.76

https:/doi.org/10.7206/DEC.1733-0092.76

Abstract

People often face choices where outcomes are both delayed and uncertain. Numerous studies of delayed gains and losses show the hyperbolalike discounting process of delayed payoffs. We assumed that when evaluating a delayed lottery people act according to the prospect theory model, where payoffs are discounted according to a hyperbolic function. The problem that we addressed is whether the a parameter of the value function v( ) and the g parameter of the probability weighting function w( ) differ for evaluations of delayed and instant lotteries. We found that when people compare delayed certain payoffs with delayed risky payoffs they are more risk prone than in situations where both certain payoffs and risky payoffs are instant. However, when people compare
present certain payoffs with delayed risky payoffs they are less risk prone than in situations where both certain payoffs and risky payoffs are instant. Additionally, the probability weighting curves were more linear for delayed lotteries than for instant lotteries (people were more sensitive to changes of probability).

Downloads1085

Discounting of Delayed Payoffs

Piotr Zielonka; Przemysław Sawicki; Rafał Weron

2009

( 11 )

https:/doi.org/

Abstract

The paper presents empirical results on the discounting of delayed payoffswhich show that: (1) the best approximation of the discounting process is a hyperbolic function, (2) (both animals and humans) can reverse their preferences in time. The article presents theoretical conditions on the intertemporal preference reversal.

Downloads1231

On Elfving problem

Anna Krasnosielska

2008

( 9 )

https:/doi.org/

Abstract

In this paper we analyze the optimal stopping time problem known as Elfving problem. The problem can be formulated as follows: a decision maker observes offers which appear at jump times of a Poisson process. The decision concerning acceptance or rejection of a presented offer is made at the moment of its appearance. Once rejected, offer cannot be considered again. A reward for the decision maker is equal to the discounting value of the selected offer. The aim of the decision maker is to maximize his expected reward. In this paper we present applications of the described model in economy and sociology. We also present the optimal strategy and a differential equation which allows us to compute the optimal mean reward. Moreover, we analyze the influence of model’s parameters on the value of optimal mean reward and we compute the mean time of waiting for the optimal stopping time.

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Collective and Individual Decisions

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