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Testable Implications of Exponential Discounting

Echenique, Federico and Saito, Kota (2013) Testable Implications of Exponential Discounting. Social Science Working Paper, 1381. California Institute of Technology , Pasadena, California. https://resolver.caltech.edu/CaltechAUTHORS:20160321-132448266

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Abstract

We develop a behavioral axiomatic characterization of exponentially discounted utility (EDU) over consumption streams. Given is an individual agent's behavior in the market: assume a finite collection of purchases across periods. We show that such behavior satisfies a "revealed preference axiom" if and only if there exists a EDU model (a discount rate per period and a concave utility function over money) that accounts for the given intertemporal consumption.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
https://resolver.caltech.edu/CaltechAUTHORS:20201214-070708764Related ItemJournal Article
ORCID:
AuthorORCID
Echenique, Federico0000-0002-1567-6770
Saito, Kota0000-0003-1189-8912
Additional Information:November 2013. We thank Kim Border and Chris Chambers for inspiration and advice.
Group:Social Science Working Papers
Subject Keywords:Discounted Utility; Impatience; Exponential Discounting; Revealed Preference; Testable Implications
Series Name:Social Science Working Paper
Issue or Number:1381
Classification Code:JEL D81, D11
Record Number:CaltechAUTHORS:20160321-132448266
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20160321-132448266
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:65542
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:22 Mar 2016 21:19
Last Modified:14 Dec 2020 15:13

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