Introduction

Standard finance assumes that economic agents discount the future exponentially - yet the original proponents of Discounted Utility Theory conceded that human beings do not act that way. Further, the influence of the passage of time on our perceptions and judgements is often overlooked, but it is crucial for investors as all outcomes involve a considerable time component between execution and outcome.

Part of the Finology short course, Behavioural Finance - Investment Decision-Making, this lecture reviews what researchers have discovered about intertemporal cho...