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Discounting Arduousness

Author

Listed:
  • Jesus Marin-Solano
  • Concepcio Patxot

    (Universitat de Barcelona)

Abstract

There is a growing literature considering deviations from standard constant discounting. In this paper we combine time-inconsistent (non-constant discounting) preferences with recursive utilities. We apply this setting to the demand side properties of what we call arduous goods. The rational for a non-standard discounting is that production and consumption are not separable in these kinds of goods. The necessary effort implies that individuals discount consumption of these goods in a special way: both biased preferences and dynamic recursive adjustment are present. In this way, willingness to make an effort, modeled as a discount factor, becomes endogenous.

Suggested Citation

  • Jesus Marin-Solano & Concepcio Patxot, 2009. "Discounting Arduousness," Working Papers in Economics 230, Universitat de Barcelona. Espai de Recerca en Economia.
    • Handle: RePEc:bar:bedcje:2009230
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D99 - Microeconomics - - Micro-Based Behavioral Economics - - - Other
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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