Preferences Between Continuous Streams of Events

Charles M. Harvey and Lars Peter Østerdal
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Charles M. Harvey: Department of Decision and Information Sciences, University of Houston

No 05-12, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: Cost-benefit and health policy studies often model a consequence occurring over time as a continuous stream of events. Such a consequence is measured by the rates at which events occur or by the states that occur, and the value of the consequence is measured by an integral. This paper presents a foundation for such models. It defines conditions on preferences between consequences that are equivalent to an integral value function having a discounting function and an intertemporal equity function.

Keywords: discounting; equity; continuous time; value function; evaluation (search for similar items in EconPapers)
JEL-codes: D01 D90 H43 I31 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-08
New Economics Papers: this item is included in nep-mic and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:0512

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