|
|
| Line 1: |
Line 1: |
| {{unreferenced|date=November 2007}}
| | I would like to introduce myself to you, I am Andrew and my spouse doesn't like it at all. Ohio is exactly where his house is and his family enjoys it. The preferred pastime for him and his children is style and he'll be starting some thing else along with it. I am currently a journey agent.<br><br>Here is my blog - psychic readings - [http://myoceancounty.net/groups/apply-these-guidelines-when-gardening-and-grow/ the full report] - |
| | |
| In [[economics]] '''exponential discounting''' is a specific form of the [[discount function]], used in the analysis of [[Intertemporal choice|choice over time]] (with or without [[uncertainty]]). Formally, exponential discounting occurs when total [[utility]] is given by
| |
| | |
| :<math>U(\{c_t\}_{t=t_1}^{t_2})=\sum_{t=t_1}^{t_2}\delta^{t-t_1}(u(c_t)),</math>
| |
| | |
| where ''c''<sub>''t''</sub> is [[Consumption (economics)|consumption]] at time ''t'', <math>\delta</math> is the exponential [[discount factor]], and ''u'' is the [[instantaneous utility function]].
| |
| | |
| In [[continuous time]], exponential discounting is given by
| |
| | |
| :<math>U(\{c(t)\}_{t=t_1}^{t_2})=\int_{t_1}^{t_2} e^{-\rho (t-t_1)}u(c(t))\,dt,</math>
| |
| | |
| Exponential discounting implies that the [[marginal rate of substitution]] between consumption at any pair of points in time depends only on how far apart those two points are. Exponential discounting is not [[dynamically inconsistent]].
| |
| | |
| For its simplicity, the exponential discounting assumption is the most commonly used in economics. However, alternatives like [[hyperbolic discounting]] have more empirical support.
| |
| | |
| ==See also==
| |
| *[[temporal discounting]]
| |
| *[[hyperbolic discounting]]
| |
| *[[intertemporal choice]]
| |
| | |
| [[Category:Intertemporal economics]]
| |
Latest revision as of 23:02, 28 December 2014
I would like to introduce myself to you, I am Andrew and my spouse doesn't like it at all. Ohio is exactly where his house is and his family enjoys it. The preferred pastime for him and his children is style and he'll be starting some thing else along with it. I am currently a journey agent.
Here is my blog - psychic readings - the full report -