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Delay aversion under a general class of preferences

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  • Mutlu, Gulseren

Abstract

I study the characterization of delay aversion in a general class of intertemporal utility functions by adapting the behavioral definition introduced by Benoit and Ok (2007). I show that when the utility functions are partially differentiable, an agent is more delay averse if and only if he has higher marginal intertemporal rate of substitution between any two consecutive consumption periods. When preferences are represented by a recursive utility function, not necessarily differentiable, I provide a simple transformation rule to represent a more delay averse agent.

Suggested Citation

  • Mutlu, Gulseren, 2013. "Delay aversion under a general class of preferences," Economics Letters, Elsevier, vol. 121(2), pages 306-310.
    • Handle: RePEc:eee:ecolet:v:121:y:2013:i:2:p:306-310
    DOI: 10.1016/j.econlet.2013.08.025
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    References listed on IDEAS

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    1. , & , A., 2007. "Delay aversion," Theoretical Economics, Econometric Society, vol. 2(1), pages 71-113, March.
    2. Epstein, Larry G & Hynes, J Allan, 1983. "The Rate of Time Preference and Dynamic Economic Analysis," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 611-635, August.
    3. Boud, John III, 1990. "Recursive utility and the Ramsey problem," Journal of Economic Theory, Elsevier, vol. 50(2), pages 326-345, April.
    4. Lucas, Robert Jr. & Stokey, Nancy L., 1984. "Optimal growth with many consumers," Journal of Economic Theory, Elsevier, vol. 32(1), pages 139-171, February.
    5. Benhabib, Jess & Jafarey, Saqib & Nishimura, Kazuo, 1988. "The dynamics of efficient intertemporal allocations with many agents, recursive preferences, and production," Journal of Economic Theory, Elsevier, vol. 44(2), pages 301-320, April.
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    More about this item

    Keywords

    Delay aversion; Time preferences; Differentiable utility; Recursive utility;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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