Delay aversion under a general class of preferences

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Detail(s)

Original languageEnglish
Pages (from-to)306-310
Journal / PublicationEconomics Letters
Volume121
Issue number2
Publication statusPublished - Nov 2013

Abstract

I study the characterization of delay aversion in a general class of intertemporal utility functions by adapting the behavioral definition introduced by Benoit and Ok (2007). I show that when the utility functions are partially differentiable, an agent is more delay averse if and only if he has higher marginal intertemporal rate of substitution between any two consecutive consumption periods. When preferences are represented by a recursive utility function, not necessarily differentiable, I provide a simple transformation rule to represent a more delay averse agent. © 2013 Elsevier B.V.

Research Area(s)

  • D90, Delay aversion, Differentiable utility, Recursive utility, Time preferences