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A representation of time discounting

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  • Heilmann, Conrad

Abstract

The concept of time discounting introduces weights on future goods to make these less valu- able. Famously, both the specic functional form of time discounting and its normative sta- tus are contested. To address these problems, this paper provides a measurement-theoretic framework of representation for time discounting. The general representation theorem char- acterises time discounting factors as ratio-scale representations of dierences in temporally extended prospects. This framework of representation is used to reconsider interpretations of time discounting factors such as time preferences, uncertainty and preference change. It also allows to compare these interpretations with regards to their normative appeal, the kinds of reductionism regarding time and preference they imply and the specic functional form of time discounting they suggest. Farther, multiple-self interpretations of decision-makers become available, such that a time discounting factor represents the degree of connectedness between temporal selves in a person.

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  • Heilmann, Conrad, 2008. "A representation of time discounting," LSE Research Online Documents on Economics 23858, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:23858
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    File URL: http://eprints.lse.ac.uk/23858/
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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