Rational hyperbolic discounting

Jos\'e Cl\'audio do Nascimento

Papers from arXiv.org

Abstract: How much should you receive in a week to be indifferent to \$ 100 in six months? Note that the indifference requires a rule to ensure the similarity between early and late payments. Assuming that rational individuals have low accuracy, then the following rule is valid: if the amounts to be paid are much less than the personal wealth, then the $q$-exponential discounting guarantees indifference in several periods. Thus, the discounting can be interpolated between hyperbolic and exponential functions due to the low accuracy to distinguish time averages when the payments have low impact on personal wealth. Therefore, there are physical conditions that allow the hyperbolic discounting regardless psycho-behavioral assumption.

Date: 2019-10, Revised 2020-02
New Economics Papers: this item is included in nep-evo, nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/1910.05209 Latest version (application/pdf)

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:arx:papers:1910.05209

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().