Temporal Discounting for Multidimensional Economic Agents
DOI:
https://doi.org/10.24193/subbi.2021.1.06Keywords:
economics, temporal discounting, intertemporal decisions.Abstract
Individuals frequently place a higher value on money and goods today than they would in the future. This is known as temporal or time discounting, and most economic models include discount functions to represent such utility over time. In this paper we evaluated traditional models with experimental data from the scientific literature and constructed our own samples for comparison. In addition, we evaluated the prediction accuracy of the models and proposed new hybrid solutions. Our investigation aims to contribute to a better understanding of human nature in complex processes.
Received by the editors: 3 April 2021.
2010 Mathematics Subject Classification. 68Q19, 91B44.
1998 CR Categories and Descriptors. J.4 [Computer Applications]: Social and BehavioralSciences – Economics; I.6.4 [Computing Methodologies]: Simulation and Modeling – Model Validation and Analysis.
References
Alahi, A., Ramanathan, V., Goel, K., Robicquet, A., Sadeghian, A.A., Fei-Fei, L., Savarese, S.: Chapter 9 - learning to predict human behavior in crowded scenes. In: Murino, V., Cristani, M., Shah, S., Savarese, S. (eds.) Group and Crowd Behavior for Computer Vision, pp. 183–207. Academic Press (2017)
Benzion, U., Rapoport, A., Yagil, J.: Discount rates inferred from decisions: An experimental study. Management science 35(3), 270–284 (1989)
Benzion, U., Yagil, J.: Decisions in financial economics: An experimental study of discount rates. Advances in Financial Economics 7, 19–40 (2002)
Van den Bos, W., McClure, S.M.: Towards a general model of temporal discounting. Journal of the experimental analysis of behavior 99(1), 58–73 (2013)
Bota, F., Simian, D.: Embedding human behavior using multidimensional economic agents. In: Simian, D., Stoica, L.F. (eds.) Modelling and Development of Intelligent Systems. pp. 3–19. Springer International Publishing, Cham (2021)
Brown, T.B., Mann, B., Ryder, N., Subbiah, M., Kaplan, J., Dhariwal, P., Neelakantan, A., Shyam, P., Sastry, G., Askell, A., et al.: Language models are few-shot learners. arXiv preprint arXiv:2005.14165 (2020)
Cartwright, E.: Behavioral economics, vol. 22. Routledge (2014)
Esopo, K., Mellow, D., Thomas, C., Uckat, H., Abraham, J., Jain, P., Jang, C., Otis, N., Riis-Vestergaard, M., Starcev, A., et al.: Measuring self-efficacy, executive function, and temporal discounting in kenya. Behaviour Research and Therapy 101, 30–45 (2018)
Fisher, I.: The theory of interest. New York 43 (1930)
Frederick, S., Loewenstein, G., O’donoghue, T.: Time discounting and time preference: A critical review. Journal of economic literature 40(2), 351–401 (2002)
Green, L., Myerson, J.: Exponential versus hyperbolic discounting of delayed outcomes: Risk and waiting time. American Zoologist 36(4), 496–505 (1996)
Keller, L.R., Strazzera, E.: Examining predictive accuracy among discounting models. Journal of Risk and Uncertainty 24(2), 143–160 (2002)
Keynes, J.M.: General theory of employment, interest and money. Atlantic Publishers & Dist (2007)
Laibson, D.: Golden eggs and hyperbolic discounting. The Quarterly Journal of Economics 112(2), 443–478 (1997)
McClure, S.M., Ericson, K.M., Laibson, D.I., Loewenstein, G., Cohen, J.D.: Time discounting for primary rewards. Journal of neuroscience 27(21), 5796–5804 (2007)
McKerchar, T.L., Green, L., Myerson, J., Pickford, T.S., Hill, J.C., Stout, S.C.: A comparison of four models of delay discounting in humans. Behavioural processes 81(2), 256–259 (2009)
Musau, A.: Modeling alternatives to exponential discounting (2009)
Nagabandi, A., Kahn, G., Fearing, R.S., Levine, S.: Neural network dynamics for model-based deep reinforcement learning with model-free fine-tuning. In: 2018 IEEE International Conference on Robotics and Automation (ICRA). pp. 7559–7566. IEEE (2018)
Pareto, V.: Manuale di economia politica con una introduzione alla scienza sociale (manual of political economy). Milano: Societa Editrice Libraria (1919)
Rajbhandari, S., Rasley, J., Ruwase, O., He, Y.: Zero: Memory optimizations toward training trillion parameter models. In: SC20: International Conference for High Performance Computing, Networking, Storage and Analysis. pp. 1–16. IEEE (2020)
Rasmusen, E., et al.: Some common confusions about hyperbolic discounting. In: Working Paper (2008)
Read, D.: Intertemporal choice. Blackwell handbook of judgment and decision making pp. 424–443 (2004)
Samuelson, P.A.: A note on measurement of utility. The Review of Economic Studies 4(2), 155–161 (1937)
Stevens, J.R.: Intertemporal similarity: Discounting as a last resort. Journal of Behavioral Decision Making 29(1), 12–24 (2016)
Thaler, R.H.: Some empirical evidence on dynamic inconsistency. Quasi rational economics 1, 127–136 (1981)
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2021 Studia Universitatis Babeș-Bolyai Informatica
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
