Comparative impatience under random discounting

Youichiro Higashi (), Kazuya Hyogo (), Norio Takeoka () and Hiroyuki Tanaka
Additional contact information
Youichiro Higashi: Okayama University
Norio Takeoka: Yokohama National University

Economic Theory, 2017, vol. 63, issue 3, No 2, 651 pages

Abstract: Abstract The random discounting model has been used as a tractable model which is consistent with preference for flexibility. By taking Goldman (J. Econ. Theory 9:203–222, 1974) as an example, we illustrate that under random discounting, the average time preference and preference for flexibility may be conflicting to each other and their mixed effect contributes to revealed impatience. To obtain sharp results in comparative statics, we ask under what kind of probability shifts on discount factors, it is possible to say that one agent always exhibits a more impatient choice than the other even when both agents have flexibility concern. We provide a behavioral definition of impatience comparisons and identify that the relative degree of impatience is measured as a probability shift of a random discount factor in the monotone likelihood ratio order.

Keywords: Time preference; Preference for flexibility; Comparative impatience; Random discounting; Monotone likelihood ratio order (search for similar items in EconPapers)
JEL-codes: D11 D81 D91 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s00199-015-0950-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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: https://EconPapers.repec.org/RePEc:spr:joecth:v:63:y:2017:i:3:d:10.1007_s00199-015-0950-3

Ordering information: This journal article can be ordered from
http://www.springer. ... eory/journal/199/PS2

DOI: 10.1007/s00199-015-0950-3

Access Statistics for this article

Economic Theory is currently edited by Nichoals Yanneils

More articles in Economic Theory from Springer, Society for the Advancement of Economic Theory (SAET) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().