Memory and discounting : theory and evidence
Heterogeneous memory capacity is largely neglected in the economics literature, although it may have profound economic implications. Adopting the concept of “memory utility” proposed by Gilboa, Postlewaite, and Samuelson (2016), we explore the relationship between memory capacity and individual disc...
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| Main Authors: | , , |
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| Other Authors: | |
| Format: | Article |
| Language: | English |
| Published: |
2019
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/104720 http://hdl.handle.net/10220/48607 |
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| Institution: | Nanyang Technological University |
| Language: | English |
| Summary: | Heterogeneous memory capacity is largely neglected in the economics literature, although it may have profound economic implications. Adopting the concept of “memory utility” proposed by Gilboa, Postlewaite, and Samuelson (2016), we explore the relationship between memory capacity and individual discounting behavior by building a simple two-period model and comparing its predictions with experimental data. Both theoretical and experimental evidence confirm that memory capacity and discount rates are positively correlated. |
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