Open AccessMeasuring Impatience in Intertemporal Choice
Author(s) -
Salvador Cruz Rambaud,
María José Muñoz Torrecillas
Publication year - 2016
Publication title -
plos one
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.99
H-Index - 332
ISSN - 1932-6203
DOI - 10.1371/journal.pone.0149256
Subject(s) - hyperbolic discounting , discounting , intertemporal choice , economics , stochastic discount factor , interval (graph theory) , time preference , econometrics , function (biology) , moment (physics) , mathematics , dynamic inconsistency , mathematical economics , microeconomics , combinatorics , biology , capital asset pricing model , physics , finance , classical mechanics , evolutionary biology
In general terms, decreasing impatience means decreasing discount rates. This property has been usually referred to as hyperbolic discounting, although there are other discount functions which also exhibit decreasing discount rates. This paper focuses on the measurement of the impatience associated with a discount function with the aim of establishing a methodology to compare this characteristic for two different discount functions. In this way, first we define the patience associated with a discount function in an interval as its corresponding discount factor and consequently we deduce that the impatience at a given moment is the corresponding instantaneous discount rate. Second we compare the degree of impatience of discount functions belonging to the same or different families, by considering the cases in which the functions do or do not intersect.