‎⁨PREreviews of A Note on the Relationship of Normative Principles Between Decision Under Risk and Over Time⁩

Skip to preprint details Skip to PREreviews

A Note on the Relationship of Normative Principles Between Decision Under Risk and Over Time

by Taiki Takahashi

Posted: October 15, 2025
Server: Preprints.org
DOI: 10.20944/preprints202510.1169.v1

Abstract

Recent advances in behavioral economics elucidated a number of deviations of actual human decisions and choices from mathematical principles of normative decision theory in neoclassical economics. This study demonstrates, by utilizing the mathematical model of probability discounting theory in behavioral psychology, that normative principles of decision making under risk (von Neumann and Morgenstern’s expected utility theory) and over time (dynamic consistency, i.e., exponential discounting) are incompatible. Possible future applications of this finding in behavioral economics and quantum epistemics are discussed.

Read the preprint

1 PREreview

Write a PREreview Request a PREreview

PREreview by Stefan Daniel Anim-Sampong

Authored by Stefan Daniel Anim-Sampong

Summary of the Research

This paper explores whether the two core rules used in neoclassical economic theory are consistent with each other. The first rule is the expected utility formula used for decisions under risk. The second rule is exponential discounting used for decisions over time. The…

Read the PREreview by Stefan Daniel Anim-Sampong

PREreviews of A Note on the Relationship of Normative Principles Between Decision Under Risk and Over Time

1 PREreview

Summary of the Research