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We design experiments to jointly elicit risk and time preferences for the adult Danish population. We find that joint elicitation results in estimates of discount rates that are dramatically lower than those found in previous studies. Estimation of latent time preferences requires that one specify a theoretical structure to understand risk and time choices,(More)
(2002) develop an experimental design to determine the risk attitude of an individual. They use their observations to argue that increased incentives appear to change risk attitudes, leading to greater risk aversion. Popular utility functions that do not allow for such effects are therefore misspecified. Building on this finding, they estimate a flexible(More)
We evaluate the claim that individuals exhibit a magnitude effect in their discounting behavior, which is said to occur when higher discount rates are inferred from choices made with lower principals, all else being equal. Much of the literature supporting this claim uses hypothetical tasks, and procedures that should not be convincing to economists. If the(More)
We re-evaluate the theory, experimental design and econometrics behind claims that individuals exhibit non-constant discounting behavior. Theory points to the importance of controlling for the non-linearity of the utility function of individuals, since the discount rate is defined over time-dated utility flows and not flows of money. It also points to a(More)