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“Hyperbolic” discounting: A recursive formulation and an application to economic growth

Authors
Publisher
Elsevier B.V.
Publication Date
Volume
109
Issue
3
Identifiers
DOI: 10.1016/j.econlet.2010.08.025
Keywords
  • Hyperbolic Discounting
  • Quasi-Hyperbolic Discounting
  • Decreasing Impatience
  • Markov Perfect Equilibrium
  • Economic Growth
Disciplines
  • Computer Science

Abstract

Abstract We axiomatize decreasing impatience (DI) in a discrete-time setting, as originally discussed by Prelec, and formulate a class of recursively-defined discounting functions that conform to DI. The recursive formulation is used to analyze the Ramsey growth problem using dynamic programming techniques.

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