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The New Palgrave Dictionary of Economics pp 6896–6903Cite as

Palgrave Macmillan

Intertemporal Choice

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Abstract

Decisions that have consequences in multiple time periods are intertemporal choices. Individuals typically discount delayed rewards much more than can be explained by mortality effects. The most common discount function is exponential in form, but hyperbolic and quasi-hyperbolic functions seem to explain empirical data better. Individual discount rates may be measured in a variety of ways, subject to important methodological caveats. Higher discount rates are empirically associated with a variety of substance abuse and impulsive conditions, including smoking, alcoholism, cocaine and heroin use, gambling, and risky health behaviours. By contrast, low discount rates may be associated with high cognitive ability.

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Authors and Affiliations

  1. http://link.springer.com/referencework/10.1057/978-1-349-95189-5

    Christopher F. Chabris, David I. Laibson & Jonathon P. Schuldt

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  1. Christopher F. Chabris
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  2. David I. Laibson
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  3. Jonathon P. Schuldt
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Chabris, C.F., Laibson, D.I., Schuldt, J.P. (2018). Intertemporal Choice. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_1987

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