Identifying Dynamic Discrete Choice Models with Hyperbolic Discounting

• Tác giả: Taiga Tsubota
• Ngôn ngữ: eng
• Ký hiệu phân loại: 003.56 Decision theory
• Thông tin xuất bản: 2021
• Bộ sưu tập: Metadata
• ID: 168242

Tóm tắt

We study identification of dynamic discrete choice models with hyperbolic discounting. We show that the standard discount factor, present bias factor, and instantaneous utility functions for the sophisticated agent are point-identified from observed conditional choice probabilities and transition probabilities in a finite horizon model. The main idea to achieve identification is to exploit variation in the observed conditional choice probabilities over time. We present the estimation method and demonstrate a good performance of the estimator by simulation.