scholarly journals Anomalies: Intertemporal Choice

1989 ◽  
Vol 3 (4) ◽  
pp. 181-193 ◽  
Author(s):  
George Loewenstein ◽  
Richard H Thaler
Keyword(s):  
Decision Making ◽  
Time Delay ◽  
Discount Rate ◽  
Intertemporal Choice ◽  
Discount Rates ◽  
Market Rate ◽  
Money Flows ◽  
Speed Up ◽  
The Way

We examine a number of situations in which people do not appear to discount money flows at the market rate of interest or any other single discount rate. Discount rates observed in both laboratory and field decision-making environments are shown to depend on the magnitude and sign of what is being discounted, on the time delay, on whether the choice is cast in terms of speed-up or delay, on the way in which a choice is framed, and on whether future benefits or costs induce savoring or dread.

scholarly journals Principled Utility Discounting Under Risk

2019 ◽  
Vol 6 (1) ◽  
pp. 89-112 ◽  
Author(s):  
Kian Mintz-Woo
Keyword(s):  
Decision Making ◽  
Discount Rate ◽  
Probability Discounting ◽  
Normative Reasons ◽  
Economic Modelling ◽  
Discount Rates ◽  
Decision Making Under Risk ◽  
Model Independent ◽  
Future Utility

Abstract Utility discounting in intertemporal economic modelling has been viewed as problematic, both for descriptive and normative reasons. However, positive utility discount rates can be defended normatively; in particular, it is rational for future utility to be discounted to take into account model-independent outcomes when decision-making under risk. The resultant values will tend to be smaller than descriptive rates under most probability assignments. This also allows us to address some objections that intertemporal considerations will be overdemanding. A principle for utility discount rates is suggested which is rooted in probability discounting. Utility discounting is defended against objections from Parfit (1984) and Broome (2005); Broome (2012). A sample utility discount rate is estimated.

scholarly journals Decision making does not benefit from using a foreign language: Evidence from cognitive reflection effects on intertemporal choice.

2020 ◽  
Author(s):  
Michal Bialek ◽  
Artur Domurat ◽  
Mariola Paruzel-Czachura ◽  
Rafal Muda
Keyword(s):  
Decision Making ◽  
Foreign Language ◽  
Decision Maker ◽  
Intertemporal Choice ◽  
Reference Points ◽  
Discount Rates ◽  
Negative Effects ◽  
Cognitive Reflection ◽  
Intertemporal Choices

Intertemporal choice requires to decide between smaller sooner and larger later payoffs, and is captured by discount rates. Across two preregistered experiments we found no evidence that using a foreign language benefitted intertemporal choices. On the contrary, there was some evidence of stronger discounting when a foreign language was used. Our results confirm that more reflective individuals tend to discount less strongly, and their intertemporal choices are also more consistent across different reference points and perspectives. In turn, this allows for greater consistency in long-term planning, benefitting a decision maker. Thinking in a foreign language did not affect such consistency, and may actually have negative effects for reflective people. Finally, although our findings hint that the benefits of cognitive reflection may be reduced when using a foreign language. This raises the questions as to why and how using a foreign language helps only some individuals, and in some decisions.

scholarly journals Frontoparietal dynamics and value accumulation in intertemporal choice

2020 ◽  
Author(s):  
Qingfang Liu ◽  
Woojong Yi ◽  
Christian A. Rodriguez ◽  
Samuel M. McClure ◽  
Brandon M. Turner
Keyword(s):  
Decision Making ◽  
Prefrontal Cortex ◽  
Time Delay ◽  
Functional Connectivity ◽  
Computational Model ◽  
Intertemporal Choice ◽  
Brain Regions ◽  
Accumulation Process ◽  
Stimulus Processing ◽  
Subjective Value

AbstractIntertemporal choice requires choosing between a smaller reward available after a shorter time delay and a larger reward available after a longer time delay. Previous studies suggest that intertemporal preferences are formed by generating a subjective value of the monetary rewards that depends on reward amount and the associated time delay. Neuroimaging results indicate that this subjective value is tracked by ventral medial prefrontal cortex (vmPFC) and ventral striatum. Subsequently, an accumulation process, subserved by a network including dorsal medial frontal cortex (dmFC), dorsal lateral prefrontal cortex (dlPFC) and posterior parietal cortex (pPC), selects a choice based on the subjective values. The mechanisms of how value accumulation interacts with subjective valuation to make a choice, and how brain regions communicate during decision making are undetermined. We developed and performed an EEG experiment that parametrically manipulated the probability of preferring delayed larger rewards. A computational model equipped with time and reward information transformation, selective attention, and stochastic value accumulation mechanisms was constructed and fit to choice and response time data using a hierarchical Bayesian approach.Phase-based functional connectivity between putative dmFC and pPC was found to be associated with stimulus processing and to resemble the reconstructed accumulation dynamics from the best performing computational model across experimental conditions. By combining computational modeling and phase-based functional connectivity, our results suggest an association between value accumulation, choice competition, and frontoparietal connectivity in intertemporal choice.Author summaryIntertemporal choice is a prominent experimental assay for impulsivity. Behavior in the task involves several cognitive functions including valuation, action selection and self-control. It is unknown how these different functions are temporally implemented during the course of decision making. In the current study, we combined formal computational models of intertemporal choice with a phase-based EEG measure of activity across brain regions to show that functional connectivity between dmFC and pPC reflects cognitive mechanisms of both visual stimulus processing and choice value accumulation. The result supports the notion that dynamic interaction between frontopatietal regions instantiates the critical value accumulation process in intertemporal choice.

scholarly journals Cost of Equity of Coal-Fired Power Generation Projects in Poland: Its Importance for the Management of Decision-Making Process

Energies ◽  
2020 ◽  
Vol 13 (18) ◽  
pp. 4833 ◽  
Author(s):  
Piotr W. Saługa ◽  
Katarzyna Szczepańska-Woszczyna ◽  
Radosław Miśkiewicz ◽  
Mateusz Chłąd
Keyword(s):  
Risk Factors ◽  
Power Generation ◽  
Decision Making ◽  
Cash Flow ◽  
Discount Rate ◽  
Equity Capital ◽  
Decision Making Process ◽  
Cost Of Equity ◽  
Discount Rates ◽  
Discounted Cash Flow

Our knowledge of discount rates plays an important role both in the discounted cash flow decision-making process and in the later phases of a project’s lifetime. It is useful than both for management and cash-flow monitoring purposes at operating stages. Investors putting money into power generation projects expect an appropriate rate of return to compensate them for a minimum acceptable real return available in the market (risk-free rate of interest) and the project’s specific risk. Due to its essential nature in the financial and economic evaluation of projects (it is the only parameter that reflects the risk), it is reasonable to assume that investors would also be interested in constituent components of that indicator. The discount rate is one parameter in the discounted cash flow analysis that takes into account the risk of a venture. Further, the previous research in this area has focused mainly on the dimension of this variable, and the structure of this parameter has not been dealt with any other studies. The proposed idea of this study met the expectations of the industry—it aimed to present a typical project implemented in the energy industry, a relatively simple methodology that allowed estimating the components within the cost of equity capital of the enterprise. In the power generation sector, one can find various types of discount rates—assessed for multiple technologies, at different development stages, and expressed differently. Owing to the know-how and decades-long experience, coal-fired power projects’ remarks may be a good benchmark for alternative low carbon technologies. That is why, in this work, a discount rate for valuing investment in new coal-fired power projects was evaluated. This assessment was made on the “bare-bones” assumption, meaning evaluations at 100% equity, after-tax, in constant (real) currency units. The analysis of the discount rate structure was performed by applying the procedure of the classical sensitivity analysis having the accuracy of key input parameters. Finally, the risk factors within the risk-adjusted discount rate were calculated. The obtained results showed the importance of individual risk factors within the risk-adjusted discount rate used in coal energy projects, which would enable a more pragmatic approach to controlling this parameter by decision-makers and understanding the risk.

Clinical Judgment Revisited

1999 ◽  
Vol 38 (04/05) ◽  
pp. 279-286 ◽  
Author(s):  
L. L. Weed
Keyword(s):  
Decision Making ◽  
Medical Practice ◽  
Clinical Judgment ◽  
Medical Information ◽  
Patient Records ◽  
Practice Of Medicine ◽  
The Way

AbstractIt is widely recognised that accessing and processing medical information in libraries and patient records is a burden beyond the capacities of the physician’s unaided mind in the conditions of medical practice. Physicians are quite capable of tremendous intellectual feats but cannot possibly do it all. The way ahead requires the development of a framework in which the brilliant pieces of understanding are routinely assembled into a working unit of social machinery that is coherent and as error free as possible – a challenge in which we ourselves are among the working parts to be organized and brought under control.Such a framework of intellectual rigor and discipline in the practice of medicine can only be achieved if knowledge is embedded in tools; the system requiring the routine use of those tools in all decision making by both providers and patients.

Patients’ practices for taking the initiative in decision-making in outpatient psychiatric consultations

2017 ◽  
Vol 13 (2) ◽  
pp. 169-184 ◽  
Author(s):  
Shuya Kushida ◽  
Takeshi Hiramoto ◽  
Yuriko Yamakawa
Keyword(s):  
Decision Making ◽  
Conversation Analysis ◽  
Treatment Decision ◽  
Close Inspection ◽  
Important Resource ◽  
Treatment Decision Making ◽  
The Way

In spite of increasing advocacy for patients’ participation in psychiatric decision-making, there has been little research on how patients actually participate in decision-making in psychiatric consultations. This study explores how patients take the initiative in decision-making over treatment in outpatient psychiatric consultations in Japan. Using the methodology of conversation analysis, we analyze 85 video-recorded ongoing consultations and find that patients select between two practices for taking the initiative in decision-making: making explicit requests for a treatment and displaying interest in a treatment without explicitly requesting it. A close inspection of transcribed interaction reveals that patients make explicit requests under the circumstances where they believe the candidate treatment is appropriate for their condition, whereas they merely display interest in a treatment when they are not certain about its appropriateness. By fitting practices to take the initiative in decision-making with the way they describe their current condition, patients are optimally managing their desire for particular treatments and the validity of their initiative actions. In conclusion, we argue that the orderly use of the two practices is one important resource for patients’ participation in treatment decision-making.

Rangda and the Goddess Durga in Bali

2017 ◽  
Vol 12 (1) ◽  
pp. 50-77
Author(s):  
Sarah Weiss
Keyword(s):  
Decision Making ◽  
Binary Opposition ◽  
Dynamic Relationship ◽  
The Witch ◽  
Purity And Impurity ◽  
Good And Evil ◽  
Negative Attributes ◽  
The Way

This article examines Rangda and her role as a chthonic and mythological figure in Bali, particularly the way in which Rangda’s identity has intertwined with that of the Hindu goddess Durga— slayer of buffalo demons and other creatures that cannot be bested by Shiva or other male Hindu gods. Images and stories about Durga in Bali are significantly different from those found in Hindu contexts in India. Although she retains the strong-willed independence and decision-making capabilities prominently associated with Durga in India, in Bali the goddess Durga is primarily associated with violent and negative attributes as well as looks and behaviours that are more usually associated with Kali in India. The reconstruction of Durga in Bali, in particular the integration of Durga with the figure of the witch Rangda, reflects the local importance of the dynamic relationship between good and bad, positive and negative forces in Bali. I suggest that Balinese representations of Rangda and Durga reveal a flux and transformation between good and evil, not simply one side of a balanced binary opposition. Transformation—here defined as the persistent movement between ritual purity and impurity—is a key element in the localization of the goddess Durga in Bali.

MEMPREDIKSI JUMLAH PRODUKSI ULOS BATAK DENGAN MENGGUNAKAN LOGIKA FUZZY DENGAN METODE TSUKAMOTO (Studi Kasus Cv. Ala Dos Roha)

2018 ◽  
Vol 2 (1) ◽  
Author(s):  
Sri Handayani Sianipar ◽  
Fince Tinus Waruwu ◽  
Lince Tomoria Sianturi
Keyword(s):  
Decision Making ◽  
Fuzzy Logic ◽  
Production Method ◽  
Production Data ◽  
Speed Up

Ulos batak toba is one of indonesia traditional fabric, precisely the traditional cloth of the batak toba. From time to time the ulos fabric was growing in terms of  type and motif. One of the companies that produces ulos batak is cv. Ala dos roha. The authors conducted this study aimed at predicting the amount of production of ulos batak to produced later. The author uses the previous request, inventory and production data using fuzzy logic tsukamoto. The final result of the calculation with this method will be more effective and efficient so as to speed up the decision making time to predict the amount of production to be produced next.Keywords: prediction, amount of  production, method of tsukamoto

Investment Management and the Investment Chain

2017 ◽  
Author(s):  
Diane-Laure Arjaliès ◽  
Philip Grant ◽  
Iain Hardie ◽  
Donald MacKenzie ◽  
Ekaterina Svetlova
Keyword(s):  
Decision Making ◽  
Asset Management ◽  
Investment Decisions ◽  
Investment Management ◽  
Money Flows ◽  
Central Argument ◽  
A Chain ◽  
Asset Managers

Chapter 1 introduces the idea of the chain as related to investment management. It highlights the increasing importance and influence of the asset management industry and argues that, despite this fact, the behaviour and decision-making of asset managers has been little studied. The chapter suggests that investment decisions today cannot be understood by focusing on isolated investors. Rather, most of their money flows through a chain: a sequence of intermediaries that ‘sit between’ savers and companies/governments. The chapter introduces the central argument of the book that investment management is shaped profoundly by the opportunities and constraints that this chain creates.

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