Work

On Multiple Discount Rates

Year: 2018

Type: article

Abstract: We propose a theory of intertemporal choice that is robust to specific assumptions on the discount rate. One class of models requires that one utility stream be chosen over another if and only if its discounted value is higher for all discount factors in a set. Another model focuses on an average discount factor. Yet another model is pessimistic, and evaluates a flow by the lowest available discounted value.

Source: Econometrica

DOI: 10.3982/ecta14866

Authors: Christopher P. Chambers, Federico Echenique

Institutions: Georgetown University, California Institute of Technology

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

Funder: National Science Foundation

Awards: Choices under Uncertainty, NeTS: Large: Networked Markets: Theory and Applications