"Hyperbolic" discounting: A recursive formulation and an application to economic growth
We axiomatize decreasing impatience (DI) in a discrete-time setting, as originally discussed by Prelec, and formulate a class of recursively-defined discounting functions that conform to DI. The recursive formulation is used to analyze the Ramsey growth problem using dynamic programming techniques.
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- Drazen Prelec, 2004. "Decreasing Impatience: A Criterion for Non-stationary Time Preference and "Hyperbolic" Discounting," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 511-532, October.
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- Young, Eric R., 2007. "Generalized quasi-geometric discounting," Economics Letters, Elsevier, vol. 96(3), pages 343-350, September.
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