A note on the relevance of the q-exponential function in the context of intertemporal choices

Daniel Cajueiro

Physica A: Statistical Mechanics and its Applications, 2006, vol. 364, issue C, 385-388

Abstract: This paper shows that the q-exponential function well known in the deformed algebra inspired in the Tsallis's nonextensive thermodynamics may be used to model discount functions in intertemporal choices which present the phenomenon known as increasing patience. Moreover, we show that this insight may also be used to provide a measure of the degree of dynamic inconsistency presented in such decisions.

Keywords: Behavioral economics; Increasing patience; q-exponential; Tsallis's thermodynamics (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:364:y:2006:i:c:p:385-388

DOI: 10.1016/j.physa.2005.08.056

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Physica A: Statistical Mechanics and its Applications is currently edited by K. A. Dawson, J. O. Indekeu, H.E. Stanley and C. Tsallis

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