ERIC Number: EJ993420
Record Type: Journal
Publication Date: 2006-May
Pages: 11
Abstractor: As Provided
ISBN: N/A
ISSN: ISSN-0022-5002
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Notes on Discounting
Rachlin, Howard
Journal of the Experimental Analysis of Behavior, v85 n3 p425-435 May 2006
In general, if a variable can be expressed as a function of its own maximum value, that function may be called a discount function. Delay discounting and probability discounting are commonly studied in psychology, but memory, matching, and economic utility also may be viewed as discounting processes. When they are so viewed, the discount function obtained is hyperbolic in form. In some cases the effective discounting variable is proportional to the physical variable on which it is based. For example, in delay discounting, the physical variable, delay (D), may enter into the hyperbolic equation as kD. In many cases, however, the discounting data are not well described with a single-parameter discount function. A much better fit is obtained when the effective variable is a power function of the physical variable (kD[superscript s] in the case of delay discounting). This power-function form fits the data of delay, probability, and memory discounting as well as other two-parameter discount functions and is consistent with both the generalized matching law and maximization of a constant-elasticity-of-substitution utility function. (Contains 2 tables, 2 figures and 3 footnotes.)
Descriptors: Memory, Probability, Theories, Economics, Social Distance, Negative Attitudes, Time, Self Concept, Delay of Gratification, Rewards
Society for the Experimental Analysis of Behavior. Available from: Indiana University Department of Psychology. Bloomington, IN 47405. Tel: 812-334-0395; Fax: 812-855-4691; e-mail: jeab@indiana.edu; Web site: http://seab.envmed.rochester.edu/jeab/index.html
Publication Type: Journal Articles; Reports - Descriptive
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Language: English
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