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Exponential Discounting under Partial Efficiency

2025/08/27 by Gauthier, Charles
#FOS: Economics and business #Theoretical Economics (econ.TH)

paper · doi:10.48550/arxiv.2508.20249

Abstract

This paper derives a novel representation of the exponential discounting model that allows one to assess departures from the model via a measure of efficiency. The approach uses a revealed preference methodology that does not make any parametric assumption on the utility function and allows for unrestricted heterogeneity. The method is illustrated using longitudinal data from checkout scanners and gives insights into sources of departure from exponential discounting.

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