Abstract
This paper studies intertemporal choice in a dynamic framework with continuous time. A model called continuous quasi-hyperbolic discounting is considered, extending the popular quasi-hyperbolic discounting to an integral form. Dynamic preference axioms, time consistency and time invariance, are formulated and used to provide a foundation for an integral form of exponential discounting; the central model of dynamic, intertemporal choice in economics. A relaxation of the time consistency axiom, complementary time consistency, is formulated to provide a dynamic preference foundation for continuous quasi-hyperbolic discounting. A preference condition for present bias is also characterised in the context of the model.
Original language | English |
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Pages (from-to) | 99-106 |
Number of pages | 8 |
Journal | Journal of Mathematical Economics |
Volume | 64 |
Early online date | 12 Apr 2016 |
DOIs | |
Publication status | Published - May 2016 |
Keywords
- Exponential discounting
- Present bias
- Quasi-hyperbolic discounting
- Time consistency