In this paper intertemporal decision making is analysed from a framework that defines the differences in value for decision options at present and future time points in terms of the extra amount of mental burden or work load that is expected to occur when a future option is chosen. It is shown how existing hyperbolic and exponential discounting models for intertemporal decision making both fit ...

Large individual differences exist in the ability to delay gratification for the sake of satisfying longer-term goals. These individual differences are commonly assayed by studying intertemporal preferences, as revealed by choices between immediate and delayed rewards. In the brain, reward-based and goal-oriented decisions are believed to rely on the striatum and its interactions with other cor...

This paper provides new evidence on the dynamics of equity risk premia in euro area stock markets across country and industry portfolios. We develop and estimate a conditional intertemporal CAPM where returns on aggregate euro area, country and industry portfolios depend on the market risk as well as on the risk that the investment opportunity set changes over time. Prices of risks are time-var...

People generally tend to advance gains and postpone losses in intertemporal choice. Jiang et al. (2014) recently showed that adding upfront losses or gains to both smaller and sooner (SS) and larger and later (LL) rewards can decrease people's discounting. To account for this decrease, they proposed the salience hypothesis, which states that introducing upfront losses or gains makes the money d...

People often forsake a larger reward later for a smaller reward sooner. The process of devaluing the larger, later prize is called temporal discounting or delay discounting, which lies at the core of intertemporal choice. Here, we describe the methodology and findings of research on the mechanisms of intertemporal choice, with a focus on those that utilize functional MRI (fMRI). We consider the...

Fundamental to any theory of capital taxation is a description of individual savings behavior. Successful descriptions of savings behavior have often resorted to the habit formation hypothesis. This paper studies the effect of habit formation on optimal capital taxes in a dynamic Mirrleesian model. We make three distinct contributions. First, we decompose intertemporal wedges (implicit capital ...

In this study we investigate the impact of competition on markets for non-durable goods where intertemporal price discrimination is possible. We develop a simple model of different potential scenarios for intertemporal price discrimination and implement it in a laboratory experiment. We compare the outcomes in monopolies and duopolies. Surprisingly, we find that competition does not necessarily...

We study the effect of financial resources on decision-making. Low-income U.S. households are randomly assigned to receive an online survey before or after payday. The survey collects measures of cognitive function and administers risk and intertemporal choice tasks. The study design generates variation in cash, checking and savings balances, and expenditures. Before-payday participants behave ...

Previous studies using Western samples have found that introducing uncertainty to an intertemporal choice decreases the degree of discounting future rewards. The authors of this article examined the effect of risk on intertemporal choice using Chinese participants and found that respondents preferred the smaller but sooner (SS) outcome to the larger but later (LL) one in the presence of risk, w...