On multiple discount rates and present bias

Pré-publication, Document de travail: In this paper, we give axiomatic foundations for a social planner objective function that takes the form of the maxmin of quasi-hyperbolic criteria. The minimum is taken over a set Q of possible pairs of discount rates δ and present bias parameters p0. When there is no present bias, we recover Chambers and Echenique’s axiomatization of maxmin exponential preferences, and when Q reduces to a singleton, we get Montiel Olea and Strzalecki’s axiomatization of quasi-hyperbolic preferences. To prove our main result, we provide some intertemporal variational representation results of interest for its own sake.

Auteur(s)

Bach Dong Xuan, Philippe Bich, Bertrand Wigniolle

Date de publication
  • 2022
Mots-clés
  • Discounting
  • Discount rate
  • Exponential model
  • Hyperbolic model
  • Maxmin expected utility discounting
  • Maxmin expected utility
Référence interne
  • PSE Working Papers n°2022-39
Pages
  • 33 p.
Version
  • 1