Hyperbolic discounting (H) is currently the dominant behavioral model of intertemporal choice, since it better explains how people behave than the normatively correct exponential discounting model (E). This paper promotes an arithmetic discounting model (A) which challenges H. First, A is more...

Results from four experiments suggest that currencies such as loyalty-program points are overvalued. Different allocations of the same quantity of points across the same number of purchases (e.g., 100 points for each first, 200 for each second, 300 for each third purchase vs. 200 for each first,...

When it comes to trading time for money (or vice versa), people tend to be impatient and myopic. Often dramatically so. For illustration, half of people would rather collect $15 now than $30 in three months. This willingness to forego 50% of the reward to skip a 3-month wait corresponds to an...

This paper has four objectives. First, we describe and evaluate three models of delay discounting (time preference), showing how they relate to each other and to already established concepts in accounting/finance and elsewhere. The models are: exponential (E), hyperbolic (H), and arithmetic (A),...

In simple static models, migration increases with the wage differential between host and home country. In a dynamic framework, and if migrations are temporary, the size of the migrant population in the host country depends also on the migration duration. This paper analyses optimal migration...

If migrants return to their origin countries, two questions arise which are of immediate economic interest for both immigration and emigration country: What determines their optimal migration duration, and what are the activities migrants choose after a return. Little research has been devoted...

What is an optimal or a sustainable external debt - for a country, region or sector? How should one monitor and evaluate debt to preclude a crisis? We use stochastic optimal control/dynamic programming to derive an optimal debt. The deviation of the actual from the optimal will serve as a...

This paper explores the relationship between time preferences, economic incentives, and body mass index (BMI). Using data from the 2006 National Longitudinal Survey of Youth, we first show that greater impatience increases BMI and the likelihood of obesity even after controlling for demographic,...

The standard model of inter-temporal optimization is based upon certainty equivalence and ignores risk and uncertainty. We solve a modification of the standard model of inter-temporal optimization in an environment where the return to capital is stochastic, and we impose the constraint that...