Hyperbolic Discounting Emerges from the Scalar Property of Interval Timing

Xu Cui

doi:10.3389/fnint.2011.00024

Abstract

Hyperbolic Discounting Emerges from the Scalar Property of Interval Timing

Highlights

In the past, a number of explanations have been offered
Ray and Bossaerts (2011) offered another time-based explanation beginning with the crucial observation that subjective or psychological time is different from objective or physical time
They argued that the discounting function is exponential with respect to the subject’s internal clock, but it appears to be hyperbolic to observers who use objective time – the measurement of which isn’t dependent upon biological systems and their inherent variability

Summary

Introduction

A number of explanations have been offered. Not surprisingly these explanations can be categorized into either value-based models or time-based models. In value-based models, hyperbolic discounting emerges when discount rates are assumed to be stochastic (Farmer and Geanakoplos, 2009), or there is uncertainty of the risk that the future reward will not be realized (Sozou, 1998), or there is uncertainty of the timing of the realization (Dasgupta and Maskin, 2005). In time-based models, hyperbolic discounting can be shown to result from the perceptual distortion of time (Takahashi, 2005; Kim and Zauberman, 2009).

Results

Conclusion