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| Author: | Benzion, U. Rapoport, A. Yagil, J. |
| Title: | Discount rates inferred from decisions : an experimental study. |
| Journal: | Management Science
1989 : MAR, VOL. 35:3, p. 270-284 |
| Index terms: | DISCOUNT RATE UTILITY THEORY DECISION MAKING |
| Language: | eng |
| Abstract: | Numerous decisions involve outcomes that are temporally remote, forcing the decision maker to compare values between immediate and delayed consequences. Formal analyses of intertemporal decisions of this kind have typically relied on the concept of discounting. The classical hypothesis asserting that the discount rate is uniform across scenarios, time delays, and sums of cashflow was flatly rejected. A market segmentation approach was found lacking. The results support an implicit risk hypothesis according to which delayed consequences are associated with an implicit risk value. |
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