On multiple discount rates and present bias
Résumé
In this paper, we give axiomatic foundations for a social planner objective function that takes the form of the maxmin of quasi-hyperbolic criteria. The minimum is taken over a set Q of possible pairs of discount rates δ and present bias parameters p0. When there is no present bias, we recover Chambers and Echenique’s axiomatization of maxmin exponential preferences, and when Q reduces to a singleton, we get Montiel Olea and Strzalecki’s axiomatization of quasi-hyperbolic preferences. To prove our main result, we provide some intertemporal variational representation results of interest for its own sake.
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