TITLE

DECISION MAKING OVER TIME AND UNDER UNCERTAINTY: A COMMON APPROACH

AUTHOR(S)
Prelec, Drazen; Loewenstein, George
PUB. DATE
July 1991
SOURCE
Management Science;Jul1991, Vol. 37 Issue 7, p770
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This paper considers a number of parallels between risky and intertemporal choice. We begin by demonstrating a one-to-one correspondence between the behavioral violations or the respective normative theories for the two domains (i.e., expected utility and discounted utility models). We argue that such violations (or preference reversals) are broadly consistent with three propositions about the weight that an attribute receives in both types of multiattribute choice. Specifically, it appears that: (1) if we add a constant to all values of an attribute, then that attribute becomes less important; (2) if we proportionately increase all values of an attribute, or if we change the sign of an attribute, from positive to negative, then that attribute becomes more important. The generality of these propositions, as well as the constraints they would impose on separable representations of multiattribute preferences, is discussed.
ACCESSION #
4732624

 

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