Endogenous discounting and the domain of the felicity function |
| |
| Authors: | Ingmar Schumacher |
| |
| Affiliation: | 1. University of Central Florida, Department of Mathematics, 4000 Central Florida Blvd., Orlando, USA;2. University of Palermo, Department of Mathematics and Computer Science, Via Archirafi 34, 90123 Palermo, Italy;1. Behavioural Science Institute, Radboud University, Nijmegen, The Netherlands;2. Donders Institute for Brain, Cognition and Behavior, Nijmegen, The Netherlands;3. Radboud University Medical Center, Department of Cognitive Neuroscience, Nijmegen, The Netherlands;4. Karakter Child and Adolescent Psychiatry University Centre, Nijmegen, The Netherlands;1. Division of Gastroenterology and Hepatology, Department of Internal Medicine, University of Michigan Health System, Ann Arbor, Michigan;2. Division of Gastroenterology and Hepatology, Department of Medicine, University of Maryland School of Medicine, Baltimore, Maryland |
| |
| Abstract: | The objective is to show that endogenous discounting models should use a felicity function constrained to a positive domain. A variety of articles use the Mangasarian or Arrow and Kurz condition as a sufficient condition for optimality, which restricts felicity to a negative domain. Since the level of the felicity function shows up in the optimal path it leads to qualitatively different solutions when one uses a negative or positive felicity function. We suggest reasons why the domain should be positive. We furthermore derive sufficiency conditions for concavity of a transformed Hamiltonian if the felicity function is assumed to be positive. |
| |
| Keywords: | |
| 本文献已被 ScienceDirect 等数据库收录！ |
|
