Journal article
Intertemporal choice with different short-term and long-term discount factors
Journal of Mathematical Economics, Vol.61, pp.139-143
2015
Abstract
This paper proposes a new axiomatic model of intertemporal choice that allows for dynamic inconsistency. We weaken the classical assumption of stationarity into two related axioms: stationarity in the short-term and stationarity in the long-term. We obtain a model with two independent discount factors, which is flexible enough to capture different time preferences, including a greater impatience for more immediate outcomes (when a long-term discount factor exceeds a compounded short-term discount factor). Our proposed model can accommodate some experimental results that cannot be rationalized by other existing models of dynamic inconsistency (such as quasi-hyperbolic discounting and generalized hyperbolic discounting).
Details
- Title
- Intertemporal choice with different short-term and long-term discount factors
- Authors/Creators
- P. Blavatskyy (Author/Creator) - Murdoch University
- Publication Details
- Journal of Mathematical Economics, Vol.61, pp.139-143
- Publisher
- Elsevier
- Identifiers
- 991005545262007891
- Copyright
- Elsevier
- Murdoch Affiliation
- School of Management and Governance
- Language
- English
- Resource Type
- Journal article
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- Web Of Science research areas
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- Mathematics, Interdisciplinary Applications
- Social Sciences, Mathematical Methods
- ESI research areas
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