Document Detail

Concave utility, transaction costs, and risk in measuring discounting of delayed rewards.
MedLine Citation:
PMID:  12549584     Owner:  NLM     Status:  MEDLINE    
Research has consistently found that the decline in the present values of delayed rewards as delay increases is better fit by hyperbolic than by exponential delay-discounting functions. However, concave utility, transaction costs, and risk each could produce hyperbolic-looking data, even when the underlying discounting function is exponential. In Experiments 1 (N = 45) and 2 (N = 103), participants placed bids indicating their present values of real future monetary rewards in computer-based 2nd-price auctions. Both experiments suggest that utility is not sufficiently concave to account for the superior fit of hyperbolic functions. Experiment 2 provided no evidence that the effects of transaction costs and risk are large enough to account for the superior fit of hyperbolic functions.
Kris N Kirby; Mariana Santiesteban
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Publication Detail:
Type:  Journal Article; Research Support, U.S. Gov't, P.H.S.    
Journal Detail:
Title:  Journal of experimental psychology. Learning, memory, and cognition     Volume:  29     ISSN:  0278-7393     ISO Abbreviation:  J Exp Psychol Learn Mem Cogn     Publication Date:  2003 Jan 
Date Detail:
Created Date:  2003-01-28     Completed Date:  2003-05-01     Revised Date:  2014-03-25    
Medline Journal Info:
Nlm Unique ID:  8207540     Medline TA:  J Exp Psychol Learn Mem Cogn     Country:  United States    
Other Details:
Languages:  eng     Pagination:  66-79     Citation Subset:  IM    
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MeSH Terms
Choice Behavior
Models, Psychological
Random Allocation
Time Factors
Grant Support

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