A naive justification of hyperbolic discounting from mental algebraic operations and functional analysis

Abstract

Background: Intertemporal decision-making, which involves making choices between outcomes at different time points, is a fundamental aspect of human behavior. Understanding the underlying mental processes is vital for comprehending the complexities of human decision-making and choice behavior. Objective: The main objective of this study is to investigate the interplay of mental processes, specifically cognitive evaluation, subjective valuation, and comparison, in the context of intertemporal decision-making, with a specific focus on understanding the discounting process. Methodology: Development of a mathematical representation of the discounting process that incorporates the mental processes associated with intertemporal decision-making. Result: Our findings indicate that hyperbolic discounting aligns well with the cognitive processes underlying intertemporal decision-making. Subsequent research will employ qualitative questionnaires to establish the discount function relevant to specific groups, thereby enhancing our comprehension of the discounting process within intertemporal decision-making.

Keywords

• discount function
• intertemporal choice
• hyperbolic discounting
• mental operations
• functional analysis