Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance?
Traditionally, the interval and delay effects have been identified and considered as the same anomaly in the context of intertemporal choice, when individuals or groups of individuals make their decisions about reward preferences. This has supposed that most studies on this topic have been focused o...
| Main Authors: | , |
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| Format: | info:eu-repo/semantics/article |
| Language: | English |
| Published: |
MDPI
2021
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| Subjects: | |
| Online Access: | http://hdl.handle.net/10835/9276 |
| _version_ | 1789406311243317248 |
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| author | Cruz Rambaud, Salvador Ortiz Fernández, Piedad |
| author_facet | Cruz Rambaud, Salvador Ortiz Fernández, Piedad |
| author_sort | Cruz Rambaud, Salvador |
| collection | DSpace |
| description | Traditionally, the interval and delay effects have been identified and considered as the same anomaly in the context of intertemporal choice, when individuals or groups of individuals make their decisions about reward preferences. This has supposed that most studies on this topic have been focused on the delay effect and, consequently, that the discount functions provided by the existing literature have considered only this effect. This is the case of hyperbolic discounting, which has been used to describe the delay, but not the interval effect. Therefore, the main objective of this paper is to carry out a detailed analysis of both anomalies, which will allow us to mathematically relate them, thus finding their analogies and differences. To do this, we will first analyze the concept of delay effect and later the different definitions of the interval effect. The main conclusion of this paper is twofold. On the one hand, if the benchmark for valuation is fixed, the delay effect coincides with the so-called decreasing interval effect. On the other hand, if the assessment reference point is the beginning of each interval, both anomalies are different. These findings make necessary to redefine the concept of interval effect. Finally, we will analyze the relationship between the interval effect, the delay effect and the subadditivity |
| format | info:eu-repo/semantics/article |
| id | oai:repositorio.ual.es:10835-9276 |
| institution | Universidad de Cuenca |
| language | English |
| publishDate | 2021 |
| publisher | MDPI |
| record_format | dspace |
| spelling | oai:repositorio.ual.es:10835-92762023-04-12T19:04:45Z Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? Cruz Rambaud, Salvador Ortiz Fernández, Piedad interval effect delay effect impatience discount function subadditivity managerial decision making Traditionally, the interval and delay effects have been identified and considered as the same anomaly in the context of intertemporal choice, when individuals or groups of individuals make their decisions about reward preferences. This has supposed that most studies on this topic have been focused on the delay effect and, consequently, that the discount functions provided by the existing literature have considered only this effect. This is the case of hyperbolic discounting, which has been used to describe the delay, but not the interval effect. Therefore, the main objective of this paper is to carry out a detailed analysis of both anomalies, which will allow us to mathematically relate them, thus finding their analogies and differences. To do this, we will first analyze the concept of delay effect and later the different definitions of the interval effect. The main conclusion of this paper is twofold. On the one hand, if the benchmark for valuation is fixed, the delay effect coincides with the so-called decreasing interval effect. On the other hand, if the assessment reference point is the beginning of each interval, both anomalies are different. These findings make necessary to redefine the concept of interval effect. Finally, we will analyze the relationship between the interval effect, the delay effect and the subadditivity 2021-01-11T11:08:20Z 2021-01-11T11:08:20Z 2020-12-29 info:eu-repo/semantics/article 2073-8994 http://hdl.handle.net/10835/9276 en https://www.mdpi.com/2073-8994/13/1/41 Attribution-NonCommercial-NoDerivatives 4.0 Internacional http://creativecommons.org/licenses/by-nc-nd/4.0/ info:eu-repo/semantics/openAccess MDPI |
| spellingShingle | interval effect delay effect impatience discount function subadditivity managerial decision making Cruz Rambaud, Salvador Ortiz Fernández, Piedad Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title | Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title_full | Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title_fullStr | Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title_full_unstemmed | Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title_short | Are Delay and Interval Effects the Same Anomaly in the Context of Intertemporal Choice in Finance? |
| title_sort | are delay and interval effects the same anomaly in the context of intertemporal choice in finance? |
| topic | interval effect delay effect impatience discount function subadditivity managerial decision making |
| url | http://hdl.handle.net/10835/9276 |
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