Discount utility is facilitated to scrutinize human decision behaviors for different points in time under the consideration of time preference. Recent studies are extended from two basic models, which are the exponential and the hyperbolic discount models, and the more popular hyperbolic discount model is well recognized for resolving the effects of preference reversal and is less steeply discounting than the exponential discount model. However, to enhance the capability of explaining intertemporal decision making behavior, an anticipative hyperbolic discount utility model was proposed which revised the conventional hyperbolic discount utility by introducing the anticipative parameters under the consideration of anticipation of future gains or losses. An empirical investigation was employed to validate the effectiveness of the proposed anticipative hyperbolic discounting utility model, which was able to empirically go beyond the traditional hyperbolic discounting utility model. Also, the proposed anticipative hyperbolic model is capable of dealing with the anomalies of preference reverse and framing effects.
All Science Journal Classification (ASJC) codes
- Computer Science(all)
- Modelling and Simulation
- Management Science and Operations Research
- Information Systems and Management