The Relation between Behavior under Risk and over Time

The paper establishes a tight relation between non-standard behaviors in the domains of risk and time, by considering a decision maker with non-expected utility preferences who believes that only present consumption is certain while any future consumption is uncertain. We provide the first complete characterizations of the two-way relations between the certainty effect and present biased temporal behavior, and between the common ratio effect and temporal reversals related to the common difference effect.