Delay aversion under a general class of preferences
I study the characterization of delay aversion in a general class of intertemporal utility functions by adapting the behavioral definition introduced by Benoit and Ok (2007). I show that when the utility functions are partially differentiable, an agent is more delay averse if and only if he has higher marginal intertemporal rate of substitution between any two consecutive consumption periods. When preferences are represented by a recursive utility function, not necessarily differentiable, I provide a simple transformation rule to represent a more delay averse agent.
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- Benhabib, Jess & Jafarey, Saqib & Nishimura, Kazuo, 1988.
"The dynamics of efficient intertemporal allocations with many agents, recursive preferences, and production,"
Journal of Economic Theory,
Elsevier, vol. 44(2), pages 301-320, April.
- Benhabib, Jess & Jafarey, Saqib & Nishimura, Kazuo, 1986. "The Dynamics of Efficient Intertemporal Allocations With Many Agents, Recursive Preferences and Production," Working Papers 86-18, C.V. Starr Center for Applied Economics, New York University.
- Lucas, Robert Jr. & Stokey, Nancy L., 1984.
"Optimal growth with many consumers,"
Journal of Economic Theory,
Elsevier, vol. 32(1), pages 139-171, February.
- Ok, Efe A. & Benoît, Jean-Pierre, 2007.
Econometric Society, vol. 2(1), pages 71-113, March.
- Epstein, Larry G & Hynes, J Allan, 1983. "The Rate of Time Preference and Dynamic Economic Analysis," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 611-35, August.
- Boud, John III, 1990. "Recursive utility and the Ramsey problem," Journal of Economic Theory, Elsevier, vol. 50(2), pages 326-345, April.
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