Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7358787 | Journal of Economic Dynamics and Control | 2018 | 25 Pages |
Abstract
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.
Related Topics
Physical Sciences and Engineering
Mathematics
Control and Optimization
Authors
Te Bao, Yun Dai, Xiaohua Yu,