Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Non stationary additive utility and time consistency

Abstract : By solving dynamic optimization programs, I study the most general class of additive intertemporal utility functionals. They are not necessarily stationary, and do not necessarily multiplicatively separate a discount factor from "per-period utility". I prove that time consistency holds if and only if the period felicity function is multiplicatively separable in t, the date of decision and in s, the date of consumption, or equivalently, if the Fisherian instantaneous subjective discount rate does not depend on t. The model allows to explain"anomalies in intertemporal choice" and various empirical regularities, even when the agents are time consistent. On the other hand, the model allows to characterize the "effective consumption profile" of naive, time-inconsistent agents mathematically.
Document type :
Preprints, Working Papers, ...
Complete list of metadatas

Cited literature [45 references]  Display  Hide  Download
Contributor : Nicolas Drouhin <>
Submitted on : Tuesday, January 19, 2016 - 11:24:43 AM
Last modification on : Sunday, January 19, 2020 - 6:38:27 PM


Files produced by the author(s)


  • HAL Id : halshs-01238584, version 2



Nicolas Drouhin. Non stationary additive utility and time consistency. 2016. ⟨halshs-01238584v2⟩



Record views


Files downloads