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Exponential Discounting under Partial Efficiency

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  • Charles Gauthier

Abstract

This paper derives a novel representation of the exponential discounting model that allows one to assess departures from the model via a measure of efficiency. The approach uses a revealed preference methodology that does not make any parametric assumption on the utility function and allows for unrestricted heterogeneity. The method is illustrated using longitudinal data from checkout scanners and gives insights into sources of departure from exponential discounting.

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  • Charles Gauthier, 2025. "Exponential Discounting under Partial Efficiency," Papers 2508.20249, arXiv.org.
    • Handle: RePEc:arx:papers:2508.20249
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    References listed on IDEAS

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    1. Dziewulski, Paweł, 2020. "Just-noticeable difference as a behavioural foundation of the critical cost-efficiency index," Journal of Economic Theory, Elsevier, vol. 188(C).
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