Browser issue

It looks like the browser you're using doesn’t work well with our website. For a better experience, please update to the latest version of Chrome, Edge, Firefox or Safari.

Intertemporal Choice - A Nash Bargaining Approach

David Baqaee

A compelling, but highly tractable, axiomatic foundation for intertemporal decision making is established and discussed. This axiomatic foundation relies on methods employed in cooperative bargaining theory. Four simple axioms imply that the intertemporal objective function is a weighted geometric average of each period's utility function. This is in contrast to standard practice, which takes the objective function to be a weighted arithmetic average. The analysis covers both finite and infinite time.