Present value as a temporal utility of wealth

Krzysztof Piasecki

Abstract

The main aim of this study was to verify that the economically justified non-additive present value function exists.This study carried out assuming fulfilment of the diminishing marginal wealth utility law.Two constant risk aversion coefficient cases were considered. Here were taken into account the absolute coefficient and the relative coefficient. Two different models of discounting functions were obtained as a result of these studies. The formal influence of behavioural factors on the discount was pointed out.