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André Lapied and Olivier Renault
''A subjective discounted utility model''
( 2012, Vol. 32 No.2 )
Intertemporal choices involve a great heterogeneity among discount mechanisms. In order to catch such diversity, we introduce an axiomatic Subjective Discounted Utility (SDU) model based on separability assumption. The originality of the SDU model rests on the fact that decision makers discount subjective periods, namely decision weights can be described as standard discount functions of time perception. In particular, our model appears as a generalization of both exponential and hyperbolic approaches.
Keywords: Discounting, Time Perception, Separability
JEL: D9 - Intertemporal Choice and Growth: General
Manuscript Received : Jan 31 2012 Manuscript Accepted : Apr 12 2012

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