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The heterogeneity of time-risk tradeoffs.
Journal of Behavioral Decision Making 2000;13(2):251-258.
Chesson HW, Viscusi WK.
Abstract
This paper uses an original sample of 146 business managers to examine the
rationality of choices with respect to deferred lotteries. Using a new empirical
methodology, it explicitly estimates implicit rates of time preference with
respect to these deferred gambles. The estimated discount rate decreases
with the time horizon of the gamble, which is consistent with violations
observed in discounted utility contexts. Cigarette smokers exhibit lower
estimated discount rates in this context, which is contrary to many popular
hypotheses about the economic causes of smoking behavior. Copyright © 2000
John Wiley & Sons, Ltd.