Questions tagged [discount]

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How to apply the direct method to elicit time preferences without utility?

The direct method (Attema et al, 2016) elicits time preferences (patience, impatience, discount factor) via a choice list procedure that does not require to know utility. Say you give a choice list ...
2answers
57 views

Why do game theorists use a discounted payoff of this form?

Excuse the click-baity title. I notice the discounted payoff in the game theory literature usually takes the form $$\sum_{t=1}^\infty\lambda(1-\lambda)^{t-1}R_t$$ This differs from the discounted ...
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discount function with logarithm

I have a function f(x) in which there is log function $f(x)=log(1+ax)-bxg(x)$ I need a discount function g(x) with which the function f(x) is concave and the value of x is not too complex. I ...
1answer
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Are sales (discounts) an investment or a loss?

Are sales (discounts) during a promotional period considered an investment by the company/manufacturer to drag in more customers? Or a loss that wouldn't be paid back anytime in the future, but also ...
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23 views

Net Present Value with investments in multiple phases

I am trying to calculate the Net Present Value for a theoretical project in which, unlike most examples in textbooks and on internet tutorials, investments do not only happen in t=0, but they also ...
2answers
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Rationale for discounting

I am interested in understanding the rationale behind discounting in the context of government policy appraisal. As far as I understand it, there are three main components to the discount values ...
1answer
125 views

Discount function

Company A needs to provide service $p$ to company B. However if the company B will reserve the $(1-\alpha)$ fraction of resource for the serving customers of company A, company A will provide a ...
2answers
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1answer
228 views

On the Ms. Exponential vs Ms. Hyperbolic vignette

I've come across this little parable purporting to show why exponential discounting is superior to hyperbolic discounting1: The greater bowing [of the hyperbolic discount curve] means that if a ...
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Continuum limit of a weighted mean of heterogeneous discount factors

I try to find the limit of the following expression of a weighted mean of a series of discount rate $\rho_{i}$ Here is the expression ; \rho_{\eta}\left(t\right)=\frac{\sum_{i}^{N}\rho_{i}\left(\...