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Updated: Apr 16, 2026

Measuring Delay Discounting in Humans Using an Adjusting Amount Task
Published on: January 9, 2016
Is there time discounting for risk premium?
1The School of Business Administration, The College of Management Academic Studies, Israel.
Abstract:
Individuals with a higher subjective discount rate concentrate more on the present and delay is more significant for them. However, when a risky asset is delayed, not only is the outcome delayed but also the risk. In this paper, we suggest a new, two-stage experimental method with real monetary incentives that allows us to distinguish between the effect of the risk and the effect of the time when pricing a risky asset. We show that when individuals have greater preference for the present, their risk aversion for a risky asset realized in the future decreases. We argue that the effect of the risk for future asset is lower for individuals with higher time preference because they discount not only the outcome but also the risks.
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