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A Note On Generalized Hyperbolic Discounting


  • Ali al-Nowaihi


  • Sanjit Dhami



In a major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time and derive the generalized hyperbolic discounting formula. Here we show that their assumption ‘common difference effect with quadratic delay’ cannot be weakened to ‘common difference effect’.

Suggested Citation

  • Ali al-Nowaihi & Sanjit Dhami, 2006. "A Note On Generalized Hyperbolic Discounting," Discussion Papers in Economics 06/10, Department of Economics, University of Leicester.
  • Handle: RePEc:lec:leecon:06/10

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    References listed on IDEAS

    1. al-Nowaihi, Ali & Dhami, Sanjit, 2006. "A note on the Loewenstein-Prelec theory of intertemporal choice," Mathematical Social Sciences, Elsevier, vol. 52(1), pages 99-108, July.
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    More about this item


    Intertemporal choice; Generalized hyperbolic discounting;

    JEL classification:

    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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