Consumption and Risk with hyperbolic discounting

Liutang Gong, William Smith and Heng-Fu Zou ()
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William Smith: Department of Economics, Fogelman

No 491, CEMA Working Papers from China Economics and Management Academy, Central University of Finance and Economics

Abstract: Hyperbolic discounting is not observationally equivalent to exponential discounting. It is always possible to calibrate an exponential model so that it predicts the same level of consumption as a hyperbolic model. However, the two models have radically different comparative statics.

Keywords: Consumption; Uncertainty; Hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: D91 E21 G11 (search for similar items in EconPapers)
Pages: 8 pages
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published in Economics Letters, Volume 96, Issue 2, August 2007, Pages 153-160

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Journal Article: Consumption and Risk with hyperbolic discounting (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:cuf:wpaper:491

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