TY  - JOUR
AB  - Purpose The main purpose of this paper is to determine the discount function which better fits the individuals' preferences through the empirical analysis of the different functions used in the field of intertemporal choice.Design/methodology/approach After an in-depth revision of the existing literature and unlike most studies which only focus on exponential and hyperbolic discounting, this manuscript compares the adjustment of data to six different discount functions. To do this, the analysis is based on the usual statistical methods, and the non-linear least squares regression, through the algorithm of Gauss-Newton, in order to estimate the models' parameters; finally, the AICc method is used to compare the significance of the six proposed models.Findings This paper shows that the so-called q-exponential function deformed by the amount is the model which better explains the individuals' preferences on both delayed gains and losses. To the extent of the authors' knowledge, this is the first time that a function different from the general hyperbola fits better to the individuals' preferences.Originality/value This paper contributes to the search of an alternative model able to explain the individual behavior in a more realistic way.
VL  - 30
IS  - 1
SN  - 2444-8494
DO  - 10.1108/EJMBE-01-2019-0003
UR  - https://doi.org/10.1108/EJMBE-01-2019-0003
AU  - Parra Oller Isabel María
AU  - Cruz Rambaud Salvador
AU  - Valls Martínez María del Carmen
PY  - 2020
Y1  - 2020/01/01
TI  - Discount models in intertemporal choice: an empirical analysis
T2  - European Journal of Management and Business Economics
PB  - Emerald Publishing Limited
SP  - 72
EP  - 91
Y2  - 2024/04/24
ER  -