[LINK] Hyperbolic discounting is rational

post by twanvl · 2011-07-28T12:14:04.204Z · LW · GW · Legacy · 1 comments

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.

 

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