Modeling the inconsistency in intertemporal choice: the generalized Weibull discount function and its extension

Salvador Cruz Rambaud, Isabel González Fernández () and Viviana Ventre ()
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Isabel González Fernández: Universidad de Almería
Viviana Ventre: Università della Campania “Luigi Vanvitelli”

Annals of Finance, 2018, vol. 14, issue 3, No 6, 415-426

Abstract: Abstract The aim of this paper is to obtain the family of the so-called generalized Weibull discount functions, introduced by Takeuchi (Game Econ Behav 71:456–478, 2011), by deforming the q-exponential discount function by means of the Stevens’ “power” law. The obtained discount functions exhibit different degrees of inconsistency and so they can be classified according to the value of their characteristic deforming parameters. Moreover, we extend the construction of the generalized Weibull discount function starting from any discount function instead of the q-exponential discounting. In any case, the value of the parameter $$\theta $$ θ of these new discount functions is extended from (0, 1] to the union of the intervals $$(-\,\infty ,0) \cup (0,+\,\infty )$$ ( - ∞ , 0 ) ∪ ( 0 , + ∞ ) .

Keywords: Dynamic inconsistency; Exponential; Hyperbolic; q-exponential; Generalized Weibull discount function; 91B28; 91B62 (search for similar items in EconPapers)
JEL-codes: C91 D81 D99 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:annfin:v:14:y:2018:i:3:d:10.1007_s10436-018-0318-3

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DOI: 10.1007/s10436-018-0318-3

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