Exponential discounting is the only time-consistent model of rational choice
The claim that exponential discounting is the only time-consistent model of rational choice is refuted by both theoretical work and empirical evidence showing that alternative formulations such as hyperbolic discounting and reward-rate maximization are also consistent with rational choice.
The claim asserts that exponential discounting is uniquely the only time-consistent model of rational choice. Papers such as [7] empirically test and find evidence for hyperbolic discounting over exponential models, while [10] demonstrates theoretically that normative reward-rate maximization leads to discounting functions containing hyperbolic components. Therefore, exponential discounting is not uniquely the sole model, and the claim is refuted.
Hubert de La Bruslerie, Alain Coën. Hyperbolic or exponential time discounting function?. 2021. https://doi.org/10.3917/fina.422.0007
Tests inter-temporal choice models and finds empirical evidence favoring a decreasing term structure of discount rates and hyperbolic discounting over exponential discounting.
See more details
Sutlief E, Walters C, Marton T, Hussain Shuler MG. The value of initiating a pursuit in temporal decision-making.. 2025. https://doi.org/10.7554/elife.99957
Shows that reward-rate maximization yields a discounting function combining hyperbolic and linear components, proving exponential discounting is not uniquely required for rationality.
The paper trail · every fact has a biography
Challenge the receipt
Citation formatting by citeproc-js (Frank Bennett) and the Citation Style Language project. Source and licenses.
Terms · Privacy · How verdicts work · Dispute this receipt