TY  - JOUR
AU  - Andreoni,James
AU  - Sprenger,Charles
TI  - Risk Preferences Are Not Time Preferences: Discounted Expected Utility with a Disproportionate Preference for Certainty
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16348
PY  - 2010
Y2  - September 2010
UR  - http://www.nber.org/papers/w16348
L1  - http://www.nber.org/papers/w16348.pdf
N1  - Author contact info:
James Andreoni
Department of Economics
University of California, San Diego
9500 Gilman Drive
La Jolla, CA 92093-0508
Tel: 858/534-3832
Fax: 858/534-7040
E-Mail: andreoni@ucsd.edu

Charles Sprenger
Department of Economics
Stanford University
Stanford, CA 94305
E-Mail: c.sprenger@gmail.com
AB  - Risk and time are intertwined. The present is known while the future is inherently risky. Discounted expected utility provides a simple, coherent structure for analyzing decisions in intertemporal, uncertain environments. However, we document robust violations of discounted expected utility, inconsistent with both prospect theory probability weighting and models with preferences for the resolution of uncertainty. We find that we can organize our data with surprising precision if we allow for a disproportionate preference for certainty. These results have potentially important implications for understanding dynamically inconsistent preferences.
ER  -