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A Note On The Loewenstein-Prelec Theory Of Intertemporal Choice
report
posted on 2009-05-11, 15:43 authored by Ali al-Nowaihi, Sanjit DhamiIn one of the major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time. We correct a number of errors in Loewenstein and Prelec (1992). Furthermore, we provide a correct, more direct and simpler derivation of their generalized hyperbolic discounting formula that has formed the basis of much recent work on temporal choice.