Discounted and Expected Utility from the Probability and Time Trade-Off Model
This paper shows the interaction between probabilistic and delayed rewards. In decision- making processes, the Expected Utility (EU) model has been employed to assess risky choices whereas the Discounted Utility (DU) model has been applied to intertemporal choices. Despite both models being differen...
| Main Authors: | , |
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| Format: | info:eu-repo/semantics/article |
| Language: | English |
| Published: |
MDPI
2020
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10835/8100 |
| _version_ | 1789406669760888832 |
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| author | Cruz Rambaud, Salvador Sánchez Pérez, Ana María |
| author_facet | Cruz Rambaud, Salvador Sánchez Pérez, Ana María |
| author_sort | Cruz Rambaud, Salvador |
| collection | DSpace |
| description | This paper shows the interaction between probabilistic and delayed rewards. In decision- making processes, the Expected Utility (EU) model has been employed to assess risky choices whereas the Discounted Utility (DU) model has been applied to intertemporal choices. Despite both models being different, they are based on the same theoretical principle: the rewards are assessed by taking into account the sum of their utilities and some similar anomalies have been revealed in both models. The aim of this paper is to characterize and consider particular cases of the Time Trade-Off (PPT) model and show that they correspond to the EU and DU models. Additionally, we will try to build a PTT model starting from a discounted and an expected utility model able to overcome the limitations pointed out by Baucells and Heukamp. |
| format | info:eu-repo/semantics/article |
| id | oai:repositorio.ual.es:10835-8100 |
| institution | Universidad de Cuenca |
| language | English |
| publishDate | 2020 |
| publisher | MDPI |
| record_format | dspace |
| spelling | oai:repositorio.ual.es:10835-81002023-04-12T19:09:34Z Discounted and Expected Utility from the Probability and Time Trade-Off Model Cruz Rambaud, Salvador Sánchez Pérez, Ana María risk delay decision-making process probability discount This paper shows the interaction between probabilistic and delayed rewards. In decision- making processes, the Expected Utility (EU) model has been employed to assess risky choices whereas the Discounted Utility (DU) model has been applied to intertemporal choices. Despite both models being different, they are based on the same theoretical principle: the rewards are assessed by taking into account the sum of their utilities and some similar anomalies have been revealed in both models. The aim of this paper is to characterize and consider particular cases of the Time Trade-Off (PPT) model and show that they correspond to the EU and DU models. Additionally, we will try to build a PTT model starting from a discounted and an expected utility model able to overcome the limitations pointed out by Baucells and Heukamp. 2020-04-28T08:07:13Z 2020-04-28T08:07:13Z 2020-04-15 info:eu-repo/semantics/article 2227-7390 http://hdl.handle.net/10835/8100 en https://www.mdpi.com/2227-7390/8/4/601 Attribution-NonCommercial-NoDerivatives 4.0 Internacional http://creativecommons.org/licenses/by-nc-nd/4.0/ info:eu-repo/semantics/openAccess MDPI |
| spellingShingle | risk delay decision-making process probability discount Cruz Rambaud, Salvador Sánchez Pérez, Ana María Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title | Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title_full | Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title_fullStr | Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title_full_unstemmed | Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title_short | Discounted and Expected Utility from the Probability and Time Trade-Off Model |
| title_sort | discounted and expected utility from the probability and time trade-off model |
| topic | risk delay decision-making process probability discount |
| url | http://hdl.handle.net/10835/8100 |
| work_keys_str_mv | AT cruzrambaudsalvador discountedandexpectedutilityfromtheprobabilityandtimetradeoffmodel AT sanchezperezanamaria discountedandexpectedutilityfromtheprobabilityandtimetradeoffmodel |