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Lifetime Uncertainty and Time Preference

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  • Nicolas Drouhin

Abstract

Despite Fisher's (1930) psychological intuitions of and the formal treatment given by Yaari (1965, Review of Economic Studies 32, 137), the intertemporal model of choice is mainly a model with certain lifetime. The purpose of this paper is to reconsider this assumption, starting from a very simple two-period model of choice with lifetime uncertainty. We examine the comparative statics of the model at the first two orders and replace the concept of `pure time preference' by taking into account the subjective treatment of the probability of survival. Copyright Kluwer Academic Publishers 2001

Suggested Citation

  • Nicolas Drouhin, 2001. "Lifetime Uncertainty and Time Preference," Theory and Decision, Springer, vol. 51(2), pages 145-172, December.
    • Handle: RePEc:kap:theord:v:51:y:2001:i:2:p:145-172
    DOI: 10.1023/A:1015598809123
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    Cited by:

    1. Christophe Hachon, 2010. "Éducation et progressivité des systèmes de retraite. Quand les inégalités face à la mort comptent," Revue économique, Presses de Sciences-Po, vol. 61(4), pages 751-769.
    2. Drouhin, Nicolas, 2015. "A rank-dependent utility model of uncertain lifetime," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 208-224.
    3. Nicolas Couderc & Nicolas Drouhin & Bruno Ventelou, 2006. "SIDA et croissance économique : le risque d'une « trappe épidémiologique »," Revue d'économie politique, Dalloz, vol. 116(5), pages 697-715.
    4. Pastén, Roberto & Cover, James P., 2015. "Tax tilting and politics: Some theory and evidence for Latin America," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 208-218.
    5. Nicolas Drouhin, 2012. "A rank-dependent utility model of uncertain lifetime, time consistency and life insurance," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00748662, HAL.
    6. Christophe Hachon, 2009. "Who Really Benefits from Pension Systems ? When Life Expectancy Matters," Revue d'économie politique, Dalloz, vol. 119(4), pages 613-632.

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