Decision making over time and under uncertainty: A common approach

This paper considers a number of parallels between risky and intertemporal choice. The authors begin by demonstrating a one-to-one correspondence between the behavioral violations of the respective normative theories for the two domains (i.e., expected utility and discounted utility models). They argue that such violations (or preference reversals) are broadly consistent with three propositions about the weight that an attribute receives in both types of multiattribute choice. Specifically, it appears that: (1)if a constant is added to all values of an attribute, then that attribute becomes less important; (2)if all values of an attribute are proportionately increased, of if the sign of an attribute is changed from positive to negative, then that attribute becomes more important. The generality of these propositions, as well as the constraints they would impose on separable representations of multiattribute preferences, is discussed.