Determining Consumers’ Discount Rates With Field Studies Because utility/profits, state transitions and discount rates are confounded in dynamic models, discount rates are typically fixed to estimate the other two factors. Yet these rate choices, if misspecified, generate poor forecasts and policy prescriptions. Using a field study wherein cellphone users transitioned from a linear to three-par...

We estimate discount rates of 555 subjects using a laboratory task and find that these individual discount rates predict inter-individual variation in field behaviors (e.g., exercise, BMI, smoking). The correlation between the discount rate and each field behavior is small: none exceeds 0.28 and many are near 0. However, the discount rate has at least as much predictive power as any variable in...

We develop a multi-asset trading model to examine the closed-end fund discount. The model shows that the discount can arise if the quality of private information in the underlying assets is sufficiently better than in the fund. The model also indicates that a discount (premium) can arise if the excessive volatility of the fund dominates (is dominated by) the fund’s diversification benefit. More...

Medicare beneficiaries used prescription drug discount cards, both Medicare and non-Medicare cards, to assist them in paying for the cost of prescription drugs. This article describes the beneficiary's awareness and understanding, sources of information, and experience with drug discount cards a year prior and during the implementation of the Medicare-Approved Prescription Drug Discount Card pr...

there is a long tradition in economics about the question of whether intergenerational discounting is fair or not. ramsey (1928) was the first economist that criticized the discounting and mentioned that the just rate of discounting is zero.  in this paper it was tried to calculate the just rate of discounting for iran with respect to islamic thoughts. according to islam, intergenerational just...

Using data from financial reorganization plans filed by insolvent Canadian firms, we estimate the discount rate implicit in the unsecured creditors' reorganization decision. Using (HARA) utility functions, we find the implicit monthly discount rate of creditors to be 4.9%, which corresponds to an annual discount rate of 77%. This is 7 to 10 times higher than discount rates used in previous empi...

This paper reexamines the time consistency of discount functions as analyzed by Strotz (1956) and Koopmans (1960). Following on an observation by Heal (1998) regarding the time consistency of logarithmic discounting, I fully characterize the class of time consistent—but not necessarily autonomous—discount functions. I use my findings to explain an apparent “paradox” in the use of the gamma disc...

Which rates should we use to discount costs and benefits of different nature at different time horizons? We answer to this question by considering a representative agent consuming two goods whose availability evolves over time in a stochastic way. We extend the Ramsey rule by taking into account of the degree of substitutability between the two goods and of the uncertainty surrounding the econo...

This paper discusses the tough love model of intergenerational altruism we developed and some of on-going empirical research on tough love behavior in survey data collected in Japan and United States. The tough love model modifies the Barro-Becker standard altruism model in two ways. First, the child’s discount factor is endogenously determined, so that low consumption at young age leads to a h...

We examine the effects o subscription behavior and wealth transferring controlled by larger shareholders on price discount of private placement. Price discount of private placement and wealth transferring effect exhibits a significant trend when larger shareholders subscribe more private placement shares. Shares proportion subscribed by larger shareholders, shares size of private placement and ...