Time discounting: Declining impatience and interval effect
AbstractMost studies have not distinguished delay from intervals, so that whether the declining impatience really holds has been an open question. We conducted an experiment that explicitly distinguishes them, and confirmed the declining impatience. This implies that people make dynamically inconsistent plans. We also found the interval effect that the per-period time discount rate decreases with prolonged intervals. We show that the interval and the magnitude effects are caused, at least partially, because subjects' choices are influenced by the differential in reward amount, while Weber's law solves neither the delay nor the interval effects.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Risk and Uncertainty.
Volume (Year): 39 (2009)
Issue (Month): 1 (August)
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Web page: http://www.springerlink.com/link.asp?id=100299
Time discount rate; Declining impatience; Interval effect; Subadditivity; Weber’s Law; D81; D90;
Other versions of this item:
- Yusuke Kinari & Fumio Ohtake & Yoshiro Tsutsui, 2007. "Time Discounting: Declining Impatience and Interval Effect," ISER Discussion Paper 0679, Institute of Social and Economic Research, Osaka University.
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D90 - Microeconomics - - Intertemporal Choice - - - General
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