Revisiting the Non-Parametric Analysis of Time-Inconsistent Preferences.
We revisit the recent revealed preference analysis of sophisticated quasi-hyperbolic consumers by Blow et al. [(2021), "Non-parametric Analysis of Time-Inconsistent Preferences", The Review of Economic Studies , 88 , 2687–2734] (BBC). We show that BBC's revealed preference test is too lax. There are...
| Published in: | Review of Economic Studies Vol. 93; no. 2; pp. 926 - 938 |
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| Main Authors: | , |
| Format: | Article |
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Oxford University Press / USA
Mar2026
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=192334042&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 192334042 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: Mar2026 vid: 93 iid: 2 pid: 622 pub: Oxford University Press / USA artinfo: ui: 192334042 10.1093/restud/rdaf047 ppf: 926 ppct: 12 formats: tig: atl: Revisiting the Non-Parametric Analysis of Time-Inconsistent Preferences. aug: au: Echenique, Federico Tserenjigmid, Gerelt affil: University of California, Berkeley, USA University of California, Santa Cruz su: Elasticity (Economics) Economic models Intertemporal choice Parameter estimation Delay discounting (Psychology) Utility theory Nonparametric statistics sug: subj: Elasticity (Economics) Economic models Intertemporal choice Parameter estimation Delay discounting (Psychology) Utility theory Nonparametric statistics keyword: Afriat's theorem copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 inLanguage:en publisher:Oxford University Press Revealed preference theory sameAs:https://dx.doi.org/10.1093/restud/rdaf047 Afriat's theorem copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 inLanguage:en publisher:Oxford University Press Revealed preference theory sameAs:https://dx.doi.org/10.1093/restud/rdaf047 ab: We revisit the recent revealed preference analysis of sophisticated quasi-hyperbolic consumers by Blow et al. [(2021), "Non-parametric Analysis of Time-Inconsistent Preferences", The Review of Economic Studies , 88 , 2687–2734] (BBC). We show that BBC's revealed preference test is too lax. There are non-rationalizable data that would pass their test. A basic problem with their test is that it requires finding a certain endogenous elasticity, without regard to the rationalizing utility. Their approach motivates a more stringent test, also based on first-order conditions, that would connect the endogenous elasticity and utility: We show that this test is also too lax. Aside from testing, we also discuss the possibility of recovering model parameters. We show that, even when discount factors are exactly identified, the approach followed in BBC allows for incorrect parameter values to lie in their identified set. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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