On May 7th, Conrad Heilmann (EIPE, Erasmus University Rotterdam) is invited in the seminar of the team Décision, Rationalité, Interaction (IHPST) (from 5.00 to 7.00 pm, seminar room of the department of cognitive studies of École Normale Supérieure, 29 rue d’Ulm, 75005 Paris). The title of his presentation will be “Exponential Time Discounting for Changing Preferences”.
Abstract: Standard derivations of exponential time discounting assume stable preferences. In contrast, this paper derives an exponential time discounting function from changing preferences. We introduce a framework in which a temporally extended agent is represented by time-indexed preference sets. A distance measure on these preference sets is used to derive a time discounting function. If a proportionality condition is satisfied, the time discounting function is exponential. Imposing different conditions also allows to derive hyperbolic discounting functions. Time discounting thus derived has a number of advantages: it disentangles time discounting from time preference, it captures recent experimental work in psychology as well as conceptual work in philosophy and behavioural economics, and it fosters a novel distinction between conditional and unconditional preference change.