Weighted discounting-On group diversity, time-inconsistency, and consequences for investment

• 成果类型: Article
• 署名作者: Ebert, Sebastian; Wei, Wei; Zhou, Xun Yu
• 署名单位: Frankfurt School Finance & Management; Heriot Watt University; Columbia University
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2020.105089
• 发表日期: 2020
• 关键词: diversity; hyperbolic discounting; INVESTMENT; parameter uncertainty; time inconsistency; Weighted discounting

摘要

This paper presents the class of weighted discount functions, which contains the discount functions commonly used in economics and finance. Weighted discount functions may describe the discounting behavior of groups, uncertainty about what discount rate to use, present-biased time preferences, and all of these simultaneously. As an application, we study investment behavior under weighted discounting and come up with the following general result: Greater group diversity, greater parameter uncertainty, and more present biased time preferences lead to delayed investment or, equivalently, more risk-taking. (c) 2020 Published by Elsevier Inc.