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Continuous quasi-hyperbolic discounting

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  • Webb, Craig S.

Abstract

This paper studies intertemporal choice in a dynamic framework with continuous time. A model called continuous quasi-hyperbolic discounting is considered, extending the popular quasi-hyperbolic discounting to an integral form. Dynamic preference axioms, time consistency and time invariance, are formulated and used to provide a foundation for an integral form of exponential discounting; the central model of dynamic, intertemporal choice in economics. A relaxation of the time consistency axiom, complementary time consistency, is formulated to provide a dynamic preference foundation for continuous quasi-hyperbolic discounting. A preference condition for present bias is also characterised in the context of the model.

Suggested Citation

  • Webb, Craig S., 2016. "Continuous quasi-hyperbolic discounting," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 99-106.
    • Handle: RePEc:eee:mateco:v:64:y:2016:i:c:p:99-106
    DOI: 10.1016/j.jmateco.2016.04.001
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    Cited by:

    1. Akin, Zafer & Yavas, Abdullah, 2023. "Elicited Time Preferences and Behavior in Long-Run Projects," MPRA Paper 117133, University Library of Munich, Germany.
    2. Chen Shou & Xiang Shengpeng & He Hongbo, 2019. "Do Time Preferences Matter in Intertemporal Consumption and Portfolio Decisions?," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 19(2), pages 1-13, June.
    3. Marcus Pivato, 2021. "Intertemporal Choice with Continuity Constraints," Mathematics of Operations Research, INFORMS, vol. 46(3), pages 1203-1229, August.
    4. Craig S. Webb, 2019. "Trichotomic discounted utility," Theory and Decision, Springer, vol. 87(3), pages 321-339, October.

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    More about this item

    Keywords

    Exponential discounting; Quasi-hyperbolic discounting; Present bias; Time consistency;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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