Delay Effect and Subadditivity. Proposal of a New Discount Function: The Asymmetric Exponential Discounting

Autor: Salvador Cruz Rambaud, Piedad Ortiz Fernández
Jazyk: angličtina
Rok vydání: 2020
Předmět:
Zdroj: Mathematics, Vol 8, Iss 3, p 367 (2020)
Druh dokumentu: article
ISSN: 2227-7390
DOI: 10.3390/math8030367
Popis: The framework of this paper is intertemporal choice and, more specifically, the so-called delay effect. Traditionally, this anomaly, also known as decreasing impatience, has been revealed when individuals reverse their preferences over monetary or non-monetary rewards. In this manuscript, we will analyze the delay effect by using preference relations and discount functions. The treatment of the delay effect with discount functions exhibits several scenarios for this paradox. Thus, the objective of this paper is to deduce the different expressions of the delay effect and their mathematical characterizations by using discount functions in stationary and dynamic settings. In this context, subadditivity will be derived as a particular case of decreasing impatience. Finally, we will introduce a new discount function, the so-called asymmetric exponential discount function, able to describe decreasing impatience.
Databáze: Directory of Open Access Journals
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