Use this URL to cite or link to this record in EThOS: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.730375
Title: Weighted discounting, time inconsistent stopping and their applications
Author: Wei, Wei
Awarding Body: University of Oxford
Current Institution: University of Oxford
Date of Award: 2016
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Abstract:
This thesis studies groups whose members disagree about the method of discounting. In particular, we provide a comprehensive treatment of discount functions that are given by the weighted average of the group members' discount functions. This class of "weighted discount functions" admits a natural notion of group diversity, which has consequences for behavior. We show that more diverse groups discount less heavily and make more patient decisions. Within a real options framework, for example, greater group diversity leads to delayed investment. Then, we show that well-known behavioral discount functions can be written as a weighted discount function. Therefore, all results in this thesis find a correspondence in a single agent setting with non-standard, behavioral time preferences. In particular, we provide an equilibrium stopping result for individuals who are aware of their time-inconsistency, but lack commitment. Finally, we propose an example which shows that the Bellman system for the equilibrium stopping problem may not admit any proper solution and illustrate that the non-existence is caused by group diversity or decreasing impatience.
Supervisor: Zhou, Xunyu Sponsor: University of Oxford
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID: uk.bl.ethos.730375  DOI: Not available
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