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Continuous Quasi-Hyperbolic Discounting

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  • Craig Webb

Abstract

This paper studies intertemporal choice in a dynamic framework with continuous time. A model called continuous quasi-hyperbolic discounting is considered, extending the popular quasi-hyperbolic discounting to an integral form. Dynamic preference axioms, time consistency and time invariance, are formulated and used to provide a foundation for an integral form of exponential discounting; the central model of dynamic, intertemporal choice in economics. A relaxion of the time consistency axiom, complementary time consistency, is formulated to provide a dynamic preference foundation for continuous quasi-hyperbolic discounting. A preference condition for present bias is also characterised in the context of the model.

Suggested Citation

  • Craig Webb, 2016. "Continuous Quasi-Hyperbolic Discounting," Economics Discussion Paper Series 1602, Economics, The University of Manchester.
  • Handle: RePEc:man:sespap:1602
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    References listed on IDEAS

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    Cited by:

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    3. Marcus Pivato, 2021. "Intertemporal Choice with Continuity Constraints," Mathematics of Operations Research, INFORMS, vol. 46(3), pages 1203-1229, August.
    4. Craig S. Webb, 2019. "Trichotomic discounted utility," Theory and Decision, Springer, vol. 87(3), pages 321-339, October.

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    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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