Abstract
Discounting functions weight utilities of outcomes received in different moments of time. A classic exponential (hyperbolic) discounting function is derived from absolute (relative) time stationarity—preferences do not change if time delays are increased/decreased by the same amount (percentage). When decision makers are sensitive to outcomes received in the near future and relatively less sensitive to outcomes received in a far-away future, it may be appropriate to transform our usual chronological time (running from zero to infinity) into a normalized time (between zero and one). New discounting functions are derived by imposing absolute and relative stationarity on such normalized time.
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