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Decision Research at Warwick (DR@W) is an interdisciplinary initiative which focuses on behavioural and experimental research of decision making.

Formed in January 2010, DR@W brings together researchers and students from Economics, Psychology, Statistics, Warwick Mathematics Institute, Warwick Manufacturing Group and Warwick Business School that are interested in current developments in the area of experimental and behavioural research.

The Department of Economics have created and manage a large computer laboratory for use with experiments.

Visit the Decision Research at Warwick website for further details.

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DR@W Forum - Hybrid Session: Neil Thakral (Brown)

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Location: WBS M1 / Zoom

This paper presents a theory of intertemporal choice based on utility from anticipation of future consumption. Following psychological and neural evidence, the model posits that decision makers (i) initially focus on the most tempting alternative in their choice set, and (ii) experience gain-loss utility from looking forward to future consumption. In the model, when evaluating a consumption stream, the decision maker chooses a level of anticipation each period, and anticipatory utility exhibits reference dependence with respect to the decision maker’s previous level of anticipation. The model provides an account for a large collection of existing empirical and experimental evidence on intertemporal choice as well as makes new predictions. First, the model implies empirical patterns such as declining discount rates, the magnitude effect, the sign effect, and the delay-speedup asymmetry. Second, it provides an explanation for why choice-based methods for eliciting discount rates lead to larger estimates than matching-based methods. Third, it predicts a relationship between small-scale risk aversion and various patterns of intertemporal choice. Finally, it provides precise conditions for the presence of two phenomena where existing evidence has been mixed: when decision makers would prefer increasing or decreasing sequences of consumption outcomes, and when discount rates exhibit subadditivity.

Meeting ID: 959 8872 5720

Passcode: 555918

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Tags: Draw Forum

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