EconPapers    
Economics at your fingertips  
 

Hyperbolic discounting may be time consistent

Nicolas Drouhin ()

PSE-Ecole d'économie de Paris (Postprint) from HAL

Abstract: Using dynamic programming methodology, the paper analyzes the most general conditions for an additive utility functional to represent time consistent preferences. It challenges the conventional wisdom of the domain, which, following Strotz(1956), assume that only exponential discounting is compatible with time consistent behavior. The paper gives some examples of special time consistent hyperbolic discount functions and also discuss the relation between time consistency and stationarity.

Keywords: intertemporal choice; consumption and saving; time consistency; time discounting; exponential discounting; hyperbolic discounting (search for similar items in EconPapers)
Date: 2009-10-12
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00633177
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Published in Economics Bulletin, Economics Bulletin, 2009, 29 (4), pp.2549-2555

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Hyperbolic discounting may be time consistent (2009) Downloads
Working Paper: Hyperbolic discounting may be time consistent (2009)
Working Paper: Hyperbolic discounting may be time consistent (2009)
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:hal:pseptp:hal-00633177

Access Statistics for this paper

More papers in PSE-Ecole d'économie de Paris (Postprint) from HAL
Bibliographic data for series maintained by Caroline Bauer ().

 
Page updated 2021-09-14
Handle: RePEc:hal:pseptp:hal-00633177