Answer to Question #172592 in Microeconomics for Thu

Question

a hyperbolic discounter is said to have time inconsistent preferences because:

Answer 1

In economics, hyperbolic discounting is a time-inconsistent model of delay discounting.

The discounted utility approach states that intertemporal choices are no different from other choices, except that some consequences are delayed and hence must be anticipated and discounted (i.e., reweighted to take into account the delay).