Random Models for the Joint Treatment of Risk and Time Preferences


The aim of this paper is to develop a simple, tractable and theoretically sound stochastic framework to deal with heterogeneous risk and time preferences. This we do in three steps: (i) study the comparative statics of the main deterministic model of risk and time preferences, the discounted expected utility, (ii) embed the model and its comparative statics within the random utility framework, and (iii) illustrate the empirical implementation of the model using several experimental datasets. The solidity of the proposed framework and its effectiveness in delivering novel methodological and empirical results of interest for the understanding of risk and time preferences are demonstrated throughout.

Working Paper
Ángelo Gutiérrez-Daza
Ángelo Gutiérrez-Daza
Ph.D. Student

I’m a PhD candidate in Economics at Universitat Pompeu Fabra and the Barcelona GSE. My research interests include macroeconomics, information acquisition, expectation formation, and computational economics.