Dynamic choices, temporal invariance and variational discounting

Bach Dong-Xuan and Philippe Bich

Papers from arXiv.org

Abstract: People often face trade-offs between costs and benefits occurring at various points in time. The predominant discounting approach is to use the exponential form. Central to this approach is the discount rate, a unique parameter that converts a future value into its present equivalent. However, a universally accepted discount rate remains a matter of ongoing debate and lacks consensus. This paper provides a robust solution for resolving conflicts in discount rates, which recommends considering all discount rates but aims to assign varying degrees of importance to these rates. Moreover, a considerable number of economists support a theory that suggests equal consideration of future and present utilities. In response to this debate, we introduce a general criterion capable of accommodating situations where it is feasible not to discount future utilities. This criterion encompasses and extends various existing criteria in the literature.

Date: 2024-08
New Economics Papers: this item is included in nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2408.05632 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:2408.05632

Access Statistics for this paper

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