Is it "Economics and Psychology"?: the Case of Hyperbolic Discounting.

The paper questions the methodology of "economics and psychology". It focuses on the case of hyperbolic discounting. Using some experimental results, I argue that the same sort of evidence which rejects the standard constant discount utility functions can just as easily reject hyperbolic discounting as well. Futhermore, a decision-making procedure based on similarity relation better explains the observations and is more intuitive. The paper concludes that combining "economics and psychology" requires opening the black box of decision-makers rather than modifying funcional forms.