A Multidisciplinary Approach to Decompose Decision-making Process in the Context of Intertemporal Choices

Abstract

This paper takes place in the context of intertemporal choices through a multidisciplinary approach involving behavioral finance, mathematical finance, temperament theory and multicriteria models of decision support techniques. The motivation at the basis of the present study is the need to investigate the discrepancy between the normative models assumed by classical finance and the actual actions of the investors. Therefore, a methodology that allows to understand the extent to which decision-making process depends on cognitive and emotional characteristics of the individual is presented. To achieve the aim, preferences are discussed in terms of the decision-maker's limited rationality through the relationship between decision inconsistency, impatience, and subjective perception of time. The applicability of our methodology addresses the strategic personalization. In fact, the irrational attitudes associated with investors' seemingly superficial choices have led to the need for customer profiling operations in the European regulatory framework, introduced in 2014/65/EU Directive.

Keywords

• anomalies
• impatience
• intertemporal choices
• perception of time
• strategic personalization