Measurement-Theoretic Foundations of Time Discounting in Economics

In economics, the concept of time discounting introduces weights on future goods to make these less valuable. Yet, both the conceptual motivation for time discounting and its specic functional form remain contested. To address these problems, this paper provides a measurement-theoretic framework of representation for time discounting. The representation theorem characterises time discounting factors by representations of time dierences. This general result can be interpreted with existing theories of time discounting to clarify their formal and conceptual assumptions. It also provides a conceptually neutral framework for comparing the descriptive and normative merits of those theories.