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Continuous quasi-hyperbolic discounting

Craig Webb

Journal of Mathematical Economics, 2016, vol. 64, issue C, 99-106

Abstract: This paper studies intertemporal choice in a dynamic framework with continuous time. A model called continuous quasi-hyperbolic discounting is considered, extending the popular quasi-hyperbolic discounting to an integral form. Dynamic preference axioms, time consistency and time invariance, are formulated and used to provide a foundation for an integral form of exponential discounting; the central model of dynamic, intertemporal choice in economics. A relaxation of the time consistency axiom, complementary time consistency, is formulated to provide a dynamic preference foundation for continuous quasi-hyperbolic discounting. A preference condition for present bias is also characterised in the context of the model.

Keywords: Exponential discounting; Quasi-hyperbolic discounting; Present bias; Time consistency (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:64:y:2016:i:c:p:99-106

DOI: 10.1016/j.jmateco.2016.04.001

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