Related papers: Hyperbolic Discounting of the Far-Distant Future
How much should you receive in a week to be indifferent to \$ 100 in six months? Note that the indifference requires a rule to ensure the similarity between early and late payments. Assuming that rational individuals have low accuracy, then…
The main goal of this paper is to investigate which normative requirements, or axioms, lead to exponential and quasi-hyperbolic forms of discounting. Exponential discounting has a well-established axiomatic foundation originally developed…
People often face trade-offs between costs and benefits occurring at various points in time. The predominant discounting approach is to use the exponential form. Central to this approach is the discount rate, a unique parameter that…
An important question in economics is how people choose between different payments in the future. The classical normative model predicts that a decision maker discounts a later payment relative to an earlier one by an exponential function…
It is well-known that for a group of time-consistent decision makers their collective time preferences may become time-inconsistent. Jackson and Yariv (2014) demonstrated that the result of aggregation of exponential discount functions…
A prominent theme in behavioural contract theory is the study of present-biased agents represented through quasi-hyperbolic discounting. In a model of competitive credit provision, we study an alternative to this framework in which the…
This paper proposes a new reinforcement learning with hyperbolic discounting. Combining a new temporal difference error with the hyperbolic discounting in recursive manner and reward-punishment framework, a new scheme to learn the optimal…
Value [4][5] is typically modeled using a continuous representation (i.e., a Real number). A discrete representation of value has recently been postulated [6]. A quantized representation of probability in the brain was also posited and…
For environmental problems such as global warming future costs must be balanced against present costs. This is traditionally done using an exponential function with a constant discount rate, which reduces the present value of future costs.…
We study the identification of dynamic discrete choice models with sophisticated, quasi-hyperbolic time preferences under exclusion restrictions. We consider both standard finite horizon problems and empirically useful infinite horizon…
This paper is concerned with the asymptotic analysis of infinite systems of weakly coupled stationary Hamilton-Jacobi-Bellman equations as the discount factor tends to zero. With a specific Hamiltonian, we show the convergence of the…
Desharnais, Gupta, Jagadeesan and Panangaden introduced a family of behavioural pseudometrics for probabilistic transition systems. These pseudometrics are a quantitative analogue of probabilistic bisimilarity. Distance zero captures…
We introduce an infinite-horizon, continuous-time portfolio selection problem faced by an agent with periodic S-shaped preference and present bias. The inclusion of a quasi-hyperbolic discount function leads to time-inconsistency and we…
Reinforcement learning has traditionally been studied with exponential discounting or the average reward setup, mainly due to their mathematical tractability. However, such frameworks fall short of accurately capturing human behavior, which…
This text contains an alternative presentation, and in certain cases an improvement, of the "hyperbolic dispersive estimate" that was proved by Anantharaman and Nonnenmacher and used to make progress towards the quantum unique ergodicity…
The appropriate discount rate for evaluating policies is a critical consideration in economic decision-making. This paper presents a new model for calculating the derived discount rate for a society that includes different groups with…
We present a thorough empirical study on real interest rates by also including risk aversion through the introduction of the market price of risk. With the view of complex systems science and its multidisciplinary approach, we use the…
In this paper, we investigate the effects of applying generalised (non-exponential) discounting on a long-run impulse control problem for a Feller-Markov process. We show that the optimal value of the discounted problem is the same as the…
In this technical note, we establish an upper-bound on the threshold on the discount factor starting from which all discounted-optimal deterministic policies are gain-optimal, that we prove to be tight on an example. To address…
This paper is dedicated to the analysis of infinite horizon optimal control problems subject to semilinear parabolic equations with constraints on the controls and discounted cost functionals. The discount factors on the cost and the state…