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Annals of Finance

, Volume 14, Issue 3, pp 415–426 | Cite as

Modeling the inconsistency in intertemporal choice: the generalized Weibull discount function and its extension

  • Salvador Cruz Rambaud
  • Isabel González Fernández
  • Viviana Ventre
Research Article

Abstract

The aim of this paper is to obtain the family of the so-called generalized Weibull discount functions, introduced by Takeuchi (Game Econ Behav 71:456–478, 2011), by deforming the q-exponential discount function by means of the Stevens’ “power” law. The obtained discount functions exhibit different degrees of inconsistency and so they can be classified according to the value of their characteristic deforming parameters. Moreover, we extend the construction of the generalized Weibull discount function starting from any discount function instead of the q-exponential discounting. In any case, the value of the parameter \(\theta \) of these new discount functions is extended from (0, 1] to the union of the intervals \((-\,\infty ,0) \cup (0,+\,\infty )\).

Keywords

Dynamic inconsistency Exponential Hyperbolic q-exponential Generalized Weibull discount function 

Mathematics Subject Classification

91B28 91B62 

JEL Classification

C91 D81 D99 

Notes

Acknowledgements

This paper has been partially supported by the project “La sostenibilidad del sistema nacional de salud: reformas, estrategias y propuestas”, reference: DER2016-76053-R, Ministerio de Economía y Competitividad.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018
corrected publication 05/2018

Authors and Affiliations

  1. 1.Departamento de Economía y EmpresaUniversidad de AlmeríaAlmeríaSpain
  2. 2.Dipartimento di Matematica e FisicaUniversità della Campania “Luigi Vanvitelli”CasertaItaly

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