Generalizing the concept of decreasing impatience

Salvador Cruz Rambaud; Fabrizio Maturo; Javier Sánchez García; Salvador Cruz Rambaud; Fabrizio Maturo; Javier Sánchez García

doi:10.3934/math.2023403

AIMS Mathematics

2023, Volume 8, Issue 4: 7990-7999. doi: 10.3934/math.2023403

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Research article

Generalizing the concept of decreasing impatience

1.
Departamento de Economía y Empresa. Universidad de Almería, La Cañada de San Urbano, s/n, 04120, Almería, Spain
2.
Faculty of Economics, Universitas Mercatorum, Piazza Mattei, 10, 00186, Roma, Italy
3.
Mediterranean Research Center of Economics and Sustainable Development (CIMEDES). Universidad de Almería, La Cañada de San Urbano, s/n, 04120, Almería, Spain

Received: 04 November 2022 Revised: 11 January 2023 Accepted: 12 January 2023 Published: 31 January 2023
MSC : 68M10

The framework of this paper is behavioral finance and, more specifically, intertemporal choice when individuals exhibit decreasing impatience in their decision-making processes. After characterizing the two main types of decreasing impatience (moderately and strongly decreasing impatience), the main objective of this paper is to generalize these concepts when the criterion of time increase is given by an arbitrary function which describes such increments. In general, the methodology is mathematical calculus but particularly the concept of derivative according to the function which rules the increase of time. The main contribution of this paper is the characterization of this extension of the concept of decreasing impatience by using the aforementioned novel derivative and the well-known Prelec's index.
- intertemporal choice,
- discount function,
- decreasing impatience,
- inconsistency
Citation: Salvador Cruz Rambaud, Fabrizio Maturo, Javier Sánchez García. Generalizing the concept of decreasing impatience[J]. AIMS Mathematics, 2023, 8(4): 7990-7999. doi: 10.3934/math.2023403

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Abstract

The framework of this paper is behavioral finance and, more specifically, intertemporal choice when individuals exhibit decreasing impatience in their decision-making processes. After characterizing the two main types of decreasing impatience (moderately and strongly decreasing impatience), the main objective of this paper is to generalize these concepts when the criterion of time increase is given by an arbitrary function which describes such increments. In general, the methodology is mathematical calculus but particularly the concept of derivative according to the function which rules the increase of time. The main contribution of this paper is the characterization of this extension of the concept of decreasing impatience by using the aforementioned novel derivative and the well-known Prelec's index.

References

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