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An a-MaxMin Utility Representation for Close and Distant Future Preferences with Temporal Biases

Author

Listed:
  • Jean-Pierre Drugeon

    (Paris School of Economics and Centre National de la Recherche Scientifique)

  • Thai Ha-Hui

    (Université Paris-Saclay, Univ Evry, EPEE)

Abstract

This paper provides a framework for understanding preferences over utility streams across different time periods. We analyze preferences for the close future, for the distant future, and a synthesis of both, establishing a representation involving weights over time periods. Examining scenarios where two utility streams cannot be robustly compared to each other, we introduce notions in which one has more "potential" to be preferred over another, which lead to MaxMin, MaxMax, and a-MaxMin representations. Finally, we consider temporal bias in the form of violations of stationarity. For close future preferences, we obtain a generalization of quasi-hyperbolic discounting. For distant future preferences, we obtain Banach limits and discuss the relationship with exponential discounting.

Suggested Citation

  • Jean-Pierre Drugeon & Thai Ha-Hui, 2023. "An a-MaxMin Utility Representation for Close and Distant Future Preferences with Temporal Biases," Documents de recherche 23-08, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:23-08
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Axiomatisation; Myopia; Multiple Discounts; a-MaxMin Citeria; Temporal Biases; Banach Limits; Infinite Dimensional Topologies;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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