[LINK] Hyperbolic discounting is rational

9 Post author: twanvl 28 July 2011 12:14PM

I just came across a paper that shows that hyperbolic discounting is the right thing to do when future discount rates are uncertain. Here is a link to the paper:

Hyperbolic discounting is rational: Valuing the far future with uncertain discount rates
by J. Doyne Farmer and John Geanakoplos

And here is a really nice writeup, which saves me from having to summarize the results myself.

 

Comments (1)

Comment author: roystgnr 29 July 2011 01:47:47AM 4 points [-]

"$100 placed at 7 percent interest compounded quarterly for 200 years will increase to more than $100,000,000 -- by which time it will be worth nothing." -- Lazarus Long, "Time Enough For Love", by Robert Heinlein