Testable Implications of Quasi-Hyperbolic and Exponential Time Discounting

Paper Number: 
1388
Creation date: 
05/20/2014
Abstract: 

We present the first revealed-preference characterizations of the models of exponential time discounting, quasi-hyperbolic time discounting, and other time-separable models of consumers' intertemporal decisions.  The characterizations provide non-parametric revealed-preference tests, which we take to data using the results of a recent experiment conducted by Andreoni and Sprenger (2012).  For such data, we find that less than half of the subjects are consistent with exponential discounting, and only a few more are consistent with quasi-hyperbolic discounting.

Paper Length: 
57
Keywords: 
Discounted Utility; Impatience; Exponential Discounting; Revealed Preference; Testable Implications
Paper: