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is the study of the relative value people assign to two or more payoffs at different points in time. This relationship is usually simplified to today and some future date. Intertemporal choice was introduced by
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When making decisions between present and future consumption, the consumer takes his/her previous consumption into account.
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because if he consumes something today it means that he can't consume it in the future and vice versa.
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The revenue is in form of interest rate. Nominal interest rate - inflation = real interest rate
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According to this model there are three types of consumption:
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in 1834 in the "Sociological Theory of
Capital". Later,
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390:{\displaystyle Y(t)+{\frac {Y(t+1)}{1+r}}}
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330:Then maximum present consumption is:
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457:{\displaystyle (1+r)Y(t)+Y(t+1)}
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242:{\displaystyle Y(t+1)}
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299:{\displaystyle Y(t)}
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319:{\displaystyle t}
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538:expanding it
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577:Categories
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470:See also
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189:Denote
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