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Discounting of delayed payoffs (Rzecz o dyskontowaniu odroczonych wyplat)

Author

Listed:
  • Piotr Zielonka
  • Przemyslaw Sawicki
  • Rafal Weron

Abstract

The paper presents empirical results on the discounting of delayed payoffs which show that: (1) the best approximation of the discounting process is a hyperbolic function, (2) (both animals and humans) can reverse their preferences in time. The article presents theoretical conditions on the intertemporal preference reversal.

Suggested Citation

  • Piotr Zielonka & Przemyslaw Sawicki & Rafal Weron, 2009. "Discounting of delayed payoffs (Rzecz o dyskontowaniu odroczonych wyplat)," HSC Research Reports HSC/09/01, Hugo Steinhaus Center, Wroclaw University of Technology.
  • Handle: RePEc:wuu:wpaper:hsc0901
    as

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    File URL: http://www.im.pwr.wroc.pl/~hugo/RePEc/wuu/wpaper/HSC_09_01.pdf
    File Function: Final draft, 2009
    Download Restriction: no

    References listed on IDEAS

    as
    1. Loewenstein, George F & Sicherman, Nachum, 1991. "Do Workers Prefer Increasing Wage Profiles?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 67-84, January.
    2. George F. Loewenstein, 1988. "Frames of Mind in Intertemporal Choice," Management Science, INFORMS, pages 200-214.
    3. Uri Benzion & Amnon Rapoport & Joseph Yagil, 1989. "Discount Rates Inferred from Decisions: An Experimental Study," Management Science, INFORMS, pages 270-284.
    4. Read, Daniel & Roelofsma, Peter H. M. P., 2003. "Subadditive versus hyperbolic discounting: A comparison of choice and matching," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 140-153, July.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Hyperbolic discounting; Intertemporal preference reversal;

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions

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