intertemporal choice

Intertemporal choice 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 John Rae in 1834 in the "Sociological Theory of Capital". Later, Eugen von Böhm-Bawerk in 1889 and Irving Fisher in 1930 elaborated on the model. Fisher model Assumptions of the model consumer's income is constant maximization of the utility anything above the line is out of explanation investments are generators of savings any property is indivisible and unchangeable According to this model there are three types of consumption: past, present and future. When making decisions between present and future consumption, the consumer takes his/her previous consumption into account.