A Note On Generalized Hyperbolic Discounting

Ali al-Nowaihi () and Sanjit Dhami

No 06/10, Discussion Papers in Economics from Division of Economics, School of Business, University of Leicester

Abstract: In a major contributions to behavioral economics, Loewenstein and Prelec (1992) set the foundations for the behavioral approach to decision making over time and derive the generalized hyperbolic discounting formula. Here we show that their assumption ‘common difference effect with quadratic delay’ cannot be weakened to ‘common difference effect’.

Keywords: Intertemporal choice; Generalized hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: C60 D91 (search for similar items in EconPapers)
Date: 2006-08
New Economics Papers: this item is included in nep-gth
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