A not so myopic axiomatization of discounting
Journal article: This article builds an axiomatization of inter-temporal trade-offs that takes an explicit account of the distant future. The focus is on separable representations and the approach is completed following a decision-theory index based approach that is applied to utility streams understood as the well-being of future generations. The introduction of some new axioms is herein shown to lead to the emergence of two distinct orders that respectively relate to the distant future and close future components of some utility stream. This enlightens the limits of the commonly used fat tail intensity requisites for the evaluation of utility streams. These are replaced by an axiomatic approach to myopia degrees.
Author(s)
Jean-Pierre Drugeon, Thai Ha Huy
Journal
- Economic Theory
Date of publication
- 2022
Keywords JEL
Keywords
- Axiomatization
- Myopia
- Temporal Order Decompositions
- Distant future sensitivities
Pages
- 349-376
URL of the HAL notice
Version
- 1
Volume
- 73