"Economics and psychology"? The case of hyperbolic discounting

Ariel Rubinstein

    Research output: Contribution to journalReview article

    Abstract

    The article questions the methodology of "economics and psychology" in its focus on the case of hyperbolic discounting. Using some experimental results, I argue that the same type of evidence, which rejects the standard constant discount utility functions, can just as easily reject hyperbolic discounting as well. Furthermore, a decision-making procedure based on similarity relations better explains the observations and is more intuitive. The article concludes that combining "economics and psychology" requires opening the black box of decision makers instead of modifying functional forms.

    Original languageEnglish (US)
    Pages (from-to)1207-1216
    Number of pages10
    JournalInternational Economic Review
    Volume44
    Issue number4
    DOIs
    StatePublished - Nov 2003

    Fingerprint

    Psychology and economics
    Hyperbolic discounting
    Discount
    Black box
    Decision maker
    Methodology
    Functional form
    Decision making
    Utility function

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    "Economics and psychology"? The case of hyperbolic discounting. / Rubinstein, Ariel.

    In: International Economic Review, Vol. 44, No. 4, 11.2003, p. 1207-1216.

    Research output: Contribution to journalReview article

    Rubinstein, Ariel. / "Economics and psychology"? The case of hyperbolic discounting. In: International Economic Review. 2003 ; Vol. 44, No. 4. pp. 1207-1216.
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