A Probabilistic Theory for Intertemporal Indifference

DOI: 10.4236/tel.2014.46053   PDF   HTML   XML   2,473 Downloads   3,201 Views  


This paper provides a closed form distribution for the probability of intertemporal indifference between a certain quantity of a commodity now, Q(0) = q0 , and some future quantity Q(T) = q at time t = T assuming a discount weight, w(T) (0,1).

Share and Cite:

Parouty, M. and Postma, M. (2014) A Probabilistic Theory for Intertemporal Indifference. Theoretical Economics Letters, 4, 415-424. doi: 10.4236/tel.2014.46053.

Conflicts of Interest

The authors declare no conflicts of interest.


[1] Dasgupta, P. and Maskin, E. (2005) Uncertainty and Hyperbolic Discounting. American Economic Review, 95, 1290-1299. http://dx.doi.org/10.1257/0002828054825637
[2] Rosati, A.G., Stevens, J.R. and Hauser, M.D. (2006) The Effect of Handling Time on Temporal Discounting in Two New World Primates. Animal Behaviour, 71, 1379-1387.
[3] Parouty, M.B.Y., Le, H.H., Krooshof, D. and Postma, M.J. (2014) Differential Time Preferences for Money and Quality of Life. Pharmacoeconomics, 32, 411-419. http://dx.doi.org/10.1007/s40273-013-0124-8
[4] Albrecht, A. and Weber, M. (1995) Hyperbolic Discounting Models in Prescriptive Theory of Intertemporal Choice. Zeitschrift fur Wirtschaftsund Sozialwissenschaften, 115, 535-568.
[5] Cropper, M.L., Aydede, S.K. and Portney, P.R. (1992) Rates of Time Preference for Saving Lives. The American Economic Review, 82, 460-472.
[6] Bazelon, B. (2002) Discounting in the Long Term. Loyala of Los Angeles Law Review, 35, 277.
[7] Beutels, P., Scuffham, P.A. and MacIntyre, C.R. (2008) Funding of Drugs: Do Vaccines Warrant a Different Approach? The Lancet Infectious Diseases, 8, 727-733. http://dx.doi.org/10.1016/S1473-3099(08)70258-5
[8] Loewenstein, G.F. and Prelec, D. (1992) Anomalies in Intertemporal Choice: Evidence and an Interpretation. Quarterly Journal of Economics, 107, 573-597. http://dx.doi.org/10.2307/2118482
[9] Frederick, S., Loewenstein, G. and O’Donoghue, T. (2002) Time Discounting and Time Preference: A Critical Review. Journal of Economic Literature, XL, 351-401. http://dx.doi.org/10.1257/jel.40.2.351
[10] Crick, F. and Koch, C. (2003) A Framework for Consciousness. Nature Neuroscience, 6, 119-126. http://dx.doi.org/10.1038/nn0203-119
[11] Meck, W.H. (1996) Neuropharmacology of Timing and Time Perception. Cognitive Brain Research, 3, 227-242. http://dx.doi.org/10.1016/0926-6410(96)00009-2
[12] Williams, G.V. and Goldman-Rakic, P.S. (1995) Modulation of Memory Fields by Dopamine D1 Receptors in Prefrontal Cortex. Nature, 376, 572-575. http://dx.doi.org/10.1038/376572a0
[13] Winterer, G., Ziller, M., Dorn, H., Frick, K., Mulert, C., Wuebben, Y., et al (2000) Schizophrenia: Reduced Signal-To-Noise Ratio and Impaired Phase-Locking during Information Processing. Clinical Neurophysiology, 111, 837-849. http://dx.doi.org/10.1016/S1388-2457(99)00322-3
[14] Holly, A. and Grush, R. (2009) A Brief History of Time-Consciousness: Historical Precursors to James and Husserl. Journal of the History of Philosophy, 47, 277-307. http://dx.doi.org/10.1353/hph.0.0118
[15] Parouty, M.B.Y. (2013) Inequality Aversion to Posterity: Discounting Human Lives.
[16] Samuelson, P. (1937) A Note on Measurement of Utility. Review of Economic Studies, 4, 155-161. http://dx.doi.org/10.2307/2967612
[17] Varadhan, S.R.S. (2001) Probability Theory. American Mathematical Society, Providence, 79-80.
[18] Forsyth, A.R. (1929) A Treatise on Differential Equations. 6th Edition, Macmilian, London, 412-414.
[19] Zoltan, S. (1999) An Elementary Proof of Binet’s Formula for the Gamma Function. The American Mathematical Monthly, 106, 156-158. http://dx.doi.org/10.2307/2589052
[20] Levy, F. and Swanson, J.M. (2001) Timing, Space and ADHD: The Dopamine Theory Revisited. Australian and New Zealand Journal of Psychiatry, 35, 504-511. http://dx.doi.org/10.1046/j.1440-1614.2001.00923.x
[21] Pastor, M.A., Artieda, J., Jahanshahi, M. and Obeso, J.A. (1992) Time Estimation and Reproduction Is Abnormal in Parkinson’s Disease. Brain: A Journal of Neurology, 115, 211-225.
[22] Davalos, D.B., Kisley, M.A. and Ross, G.R. (2002) Deficits in Auditory and Visual Temporal Perception in Schizophrenia. Cognitive Neuropsychiatry, 7, 273-282.
[23] Wittmann, M., Carter, O., Hasler, F., Cahn, B.R., Grimberg, U., Spring, P., Hell, D., Flohr, H. and Vollenweider, F.X. (2007) Effects of Psilocybin on Time Perception and Temporal Control of Behavior in Humans. Journal of Psycho-pharmachology, 21, 50-64.
[24] Kringelbach, M.L. and Berridge, K.C. (2003) Towards a Functional Neuroanatomy of Pleasure and Happiness. Trends in Cognitive Sciences, 13, 479-487. http://dx.doi.org/10.1016/j.tics.2009.08.006

comments powered by Disqus

Copyright © 2020 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.