Decreasing Impatience

TL;DR

This paper characterizes decreasing impatience in intertemporal choice, linking it to convexity axioms, geometric averages of hyperbolic discount rates, and parimutuel preference aggregation of exponential discounts.

Contribution

It introduces a new convexity axiom characterization and connects decreasing impatience to geometric averages and preference aggregation methods.

Findings

Decreasing impatience is characterized by a convexity axiom.

They are equivalent to a geometric average of generalized hyperbolic discount rates.

Decreasing impatience emerges through parimutuel aggregation of exponential discounts.

Abstract

We characterize decreasing impatience, a common behavioral phenomenon in intertemporal choice. Discount factors that display decreasing impatience are characterized through a convexit y axiom for investments at fixed interest rates. Then we show that they are equivalent to a geometric average of generalized quasi-hype rbolic discount rates. Finally, they emerge through parimutuel preference aggregation of exponential discount factors.