Standard econometric models of discrete choice (such as Fechner model of random errors, Luce’s choice model and random utility or random preference approach) are not well suited for applications to intertemporal choice. This paper proposes a new model that does not violate temporal dominance,...

When is an individual A clearly more patient than an individual B? Three answers appear to be natural. First, whenever B is willing to undertake some investment project, A is moreover so. Second, for any stream of monetary payoffs, A's present-day equivalent is at least as high as that of B....

We here estimate a number of alternatives to discounted-utility theory, such as quasi-hyperbolic discounting, generalized hyperbolic discounting, and rank-dependent discounted utility with three different models of probabilistic choice. The data come from a controlled laboratory experiment...

This paper considers intertemporal choice when the timing of future events cannot be objectively (chronologically) measured a priori and presents foundations of subjective time measurement. If preferences of a decision maker satisfy certain behavioral assumptions, then this decision maker...

A new model of intertemporal choice — "discounted incremental utility" (DIU) — is presented. DIU coincides with Samuelson's discounted utility (constant/exponential discounting) when utility function is linear. DIU has several advantages over discounted utility (and its generalizations —...