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Published September 2018 | public
Journal Article

Random Intertemporal Choice


We provide a theory of random intertemporal choice. Agents exhibit stochastic choice over consumption due to preference shocks to discounting attitudes. We first demonstrate how the distribution of these preference shocks can be uniquely identified from random choice data. We then provide axiomatic characterizations of some common random discounting models, including exponential and quasi-hyperbolic discounting. In particular, we show how testing for exponential discounting under stochastic choice involves checking for both a stochastic version of stationarity and a novel axiom characterizing decreasing impatience.

Additional Information

© 2018 Elsevier Inc. Received 11 April 2017, Revised 27 May 2018, Accepted 15 August 2018, Available online 17 August 2018. We want to thank David Ahn, Jose Apesteguia, Miguel Ballester, Yoram Halevy, Yoichiro Higashi, Vijay Krishna, Tomasz Strzalecki, Charlie Sprenger and participants at D-Day at Duke, LA Theory Bash, UCSD, Barcelona GSE Stochastic Choice Workshop, D-TEA and the 16th SAET Conference at IMPA for their helpful comments.

Additional details

August 19, 2023
October 18, 2023