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Immanuel Lampe
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Lampe
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Immanuel
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Item type:Publication, Prospect Theory for Intertemporal ChoiceProspect theory is well understood in contexts without a time dimension. In intertemporal contexts, however, it is unclear how prospect theory should be applied. In particular, it is unclear whether probabilities should be weighted within time periods or whether probabilities of discounted utilities (or present values) of outcome streams should be weighted. Furthermore, it is unclear what parametric specifications of probability weighting and utility functions should be used. We find in a pre-registered experiment on a representative sample that weighting probabilities of discounted utilities (or present values) predicts decisions best. The estimated probability weighting functions are inverse-S shaped, and the utility functions are almost linear.Type:journal articleJournal:Journal of the European Economic Association - Some of the metrics are blocked by yourconsent settings
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Item type:Publication, Essays in Financial Decision MakingThe three projects of this thesis investigate consumers' financial decision making. For two projects I employ survey questions to elicit subjects' preferences and link these to insurance demand decisions. In the third project I conduct an experiment on a representative sample to find out how prospect theory should best be applied to an intertemporal context.Type:doctoral thesis - Some of the metrics are blocked by yourconsent settings
Item type:Publication, Intertemporal Prospect Theory(2021-05-19); Prospect Theory is the most prominent contender of expected utility theory to describe decisions under risk. In atemporal contexts, prospect theory is well understood. In intertemporal contexts, however, it is not clear how prospect theory should be applied (in particular, whether probabilities should be weighted within time periods or whether the probabilities of present values should be weighted). It is also unclear what parametric specifications of probability-weighting and value functions should be used. We find in a pre-registered experiment on a representative sample that an application of prospect theory weighting probabilities of present values predicts decisions best. Estimated probability weighting functions are very similar to those typically estimated in atemporal settings, while value functions are almost linear with a loss aversion coefficient close to one.Type:working paper