Time Compression

David Aadland () and Sherrill Shaffer

MPRA Paper from University Library of Munich, Germany

Abstract: Economists have generally ignored the notion that perceived time may differ from clock time. Borrowing from the behavioral psychology literature, we investigate the case of time compression whereby perceived time passes more quickly than actual time. A framework is presented to embed time compression in economic models. We then apply the principle to a standard lifecycle permanent income model with endogenous labor. Time compression provides an alternative explanation of why older individuals, even those without declining labor productivity, may choose to reduce their work effort.

Keywords: Time Compression; Discounting; Lifecycle Permanent Income Model; Retirement (search for similar items in EconPapers)
JEL-codes: D03 D91 (search for similar items in EconPapers)
Date: 2010-10-01
New Economics Papers: this item is included in nep-age, nep-evo, nep-hpe, nep-lab and nep-mic
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https://mpra.ub.uni-muenchen.de/29298/1/MPRA_paper_29298.pdf original version (application/pdf)

Related works:
Working Paper: Time Compression (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29298

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