A Spatial-Discounting Theory of Interaction Preferences

Abstract

In a variety of situations involving human interaction, actors compare alternative interaction opportunities in terms of their perceived distance or accessibility to opportunities within some relevant space of attributes. In this paper, a theory of interaction preferences is proposed in which actors implicitly discount potential opportunity interactions in terms of these perceived distances. This form of implicit discounting behavior is shown to be characterized by three general axioms of observable preference behavior. The special case of exponential spatial discounting is also characterized explicitly. In addition, conditions are established under which discounted preferences are representable by utility functions. Finally, the dependence of discounted preferences on the underlying configuration of distances is examined in depth.