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Continuous Quasi-Hyperbolic Discounting

Listed author(s):
  • Craig Webb

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 relaxation 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.

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File URL: http://hummedia.manchester.ac.uk/schools/soss/economics/discussionpapers/EDP-1602.pdf
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Paper provided by Economics, The University of Manchester in its series The School of Economics Discussion Paper Series with number 1602.

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Date of creation: 2016
Handle: RePEc:man:sespap:1602
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Web page: http://www.socialsciences.manchester.ac.uk/subjects/economics/

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  17. Pan, Jinrui & Webb, Craig S. & Zank, Horst, 2015. "An extension of quasi-hyperbolic discounting to continuous time," Games and Economic Behavior, Elsevier, vol. 89(C), pages 43-55.
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