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Year 2014-03-03 
Issue 18

When one might expect negative discount rate?

Marcin Palenik
Katedra Psychologii Ekonomicznej Akademia Leona Koźmińskiego

2014-03-03 (18) Decyzje


Both in economics and psychology, positive discount rate is usually assumed as an axiom. However, there are circumstances which may lead to negative discount rate. This article presents such a phenomenon. Moreover, author presents particular cases of theories and models which imply preference of receiving lower income in later period of time, rather than higher income in earlier period of time (“less later than more earlier”). The described models are as follows: Life Cycle Hypothesis together with Self Control Theory, Construal Level Theory, Model of Patience Formation and Loewenstein’s Anticipation Model. Authors conclude that there is a need of empirical research verifying implications of these models concerning negative discount rate. Authors believe that the problem of negative discount rate
deserves more attention, taking into account that in developed countries interest rates are close to zero and it still does not discourage customers from putting money aside.

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APA style

Palenik, M. . (2012). When one might expect negative discount rate?. Decyzje, (18), 83 104. Retrieved de https://journal.kozminski.edu.pl/index.php/decyzje/article/view/44 (Original work published 2014-03-03)

MLA style

Palenik, M. . “When One Might Expect Negative Discount Rate?”. 2014-03-03. Decyzje, no. 18, 2012, p. 83 104.

Chicago style

Palenik, Marcin . “When One Might Expect Negative Discount Rate?”. Decyzje, Decyzje, no. 18 (2012): 83 104. https://journal.kozminski.edu.pl/index.php/decyzje/article/view/44.