Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/100149
Authors: 
Adriani, Fabrizio
Sonderegger, Silvia
Year of Publication: 
2014
Series/Report no.: 
CeDEx Discussion Paper Series 2014-06
Abstract: 
We study Nature's trade-off when endowing people with the cognitive ability to distinguish between different time periods or different prizes. Our key premise is that cognitive ability is a scarce resource, to be deployed only where and when it really matters. We show that this simple insight can explain a number of observed anomalies: (i) time preference reversal, (ii) magnitude effects, (iii) cycles, (iv) interval length effects. An implication of our analysis is that, from an evolutionary perspective, people may be suffering from too much tendency to postpone (rather than to anticipate) consumption, turning upside-down existing interpretations of preference reversal.
JEL: 
D01
D81
D83
Document Type: 
Working Paper

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