Discounting Under Impact of Risk Aversion

9 Pages Posted: 6 Feb 2015

Date Written: February 5, 2015

Abstract

The main aim of this study is to describe risk aversion impact on present value. The term risk aversion and the loss risk aversion are considered in this work. Three different models of discounting functions are obtained as a result of these studies. The formal influence of behavioural factors on the discount was pointed out. In this way it is show that that non-additive present value function may be economically justified. This study carries out assuming fulfilment of the diminishing marginal wealth utility law.

Keywords: Present value, Discounting, Discounted utility, Risk aversion, First Gossen’s Law

JEL Classification: C02, D92, G02, G12

Suggested Citation

Piasecki, Krzysztof Maciej, Discounting Under Impact of Risk Aversion (February 5, 2015). Available at SSRN: https://ssrn.com/abstract=2560989 or http://dx.doi.org/10.2139/ssrn.2560989

Krzysztof Maciej Piasecki (Contact Author)

Poznan University of Economics ( email )

Poznan, 60-967
Poland

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
37
Abstract Views
413
PlumX Metrics