Economics at your fingertips  

Decreasing impatience and the magnitude effect jointly contradict exponential discounting

Jawwad Noor ()

Journal of Economic Theory, 2009, vol. 144, issue 2, 869-875

Abstract: The experimental literature on time preference finds that the manner in which subjects discount money (as opposed to utility) exhibits properties known as Decreasing Impatience and the Magnitude Effect. While these findings are often referred to as anomalies for the Exponential Discounting model, several authors have demonstrated that each of these qualitative findings can be explained by the curvature of utility and thus are not anomalies. We prove that, under basic regularity conditions, the two findings jointly imply the existence of Preference Reversals, and thus jointly contradict the Exponential Discounting model.

Keywords: Time; preference; Preference; reversals; Decreasing; impatience; Magnitude; effect; DU; anomalies (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Haili He ().

Page updated 2020-09-12
Handle: RePEc:eee:jetheo:v:144:y:2009:i:2:p:869-875