The hyperbolic model (Mazur, 1987) is a descriptive model, calculated as V = A / (1+kD), where V is the present value, A is the future amount, D is the delay,1 and k is the discount rate.

## How does hyperbolic discounting differ from exponential discounting and what implications does it have?

These indifferences reflect annual discount rates that declined from 277% to 139% to 63% as delays got longer. This contrasts with exponential discounting, in which valuation falls by a **constant factor per unit delay and the discount rate stays** the same.

## How is indifference point delay discounting calculated?

AUC is calculated as **(x _{2} – x_{1})[(y_{1} + y_{2})/2]**, where x

_{1}and x

_{2}are the successive delays and y

_{1}and y

_{2}are the indifference points for those delays (see provided R code). AUC ranges between 0 and 1 and lower values indicate steeper discounting.

## How do you calculate k discount for delay discounting?

V = A/(1 + kD), where V is the present **value** of the **delayed** reward A at **delay** D, and **k** is a free parameter that determines the discount rate. The higher one’s discount rate (**k**) is, the more they discount larger future rewards.

## What do you mean by hyperbolic discounting?

Hyperbolic discounting is **our inclination to choose immediate rewards over rewards that come later in the future**, even when these immediate rewards are smaller.

## What is meant by discounting?

Discounting is the **process of determining the present value of a payment or a stream of payments that is to be received in the future**. Given the time value of money, a dollar is worth more today than it would be worth tomorrow. Discounting is the primary factor used in pricing a stream of tomorrow’s cash flows.

## What is hyperbolic effect?

Geeky Definition of the Hyperbolic Discounting Effect: The Hyperbolic Discounting Effect is **the tendency to show a preference for a reward that arrives sooner rather than later**. Studies show that we are likely to discount the value of the later reward more as the length of the delay increases.

## Why is delay discounting important?

Delay discounting is **not only correlated with drug abuse**, as noted previously, but also may predict the likelihood of initiating drug use and treatment outcomes from drug abuse cessation attempts (e.g., MacKillop & Kahler, 2009).

## What is delay discounting rate?

Delay discounting is the degree **(i.e., the rate) to which one discounts or de-values a reward as a function of the amount of time to the receipt of that reward**.

## What is discounting in psychology?

In psychology, the discounting principle refers **to how someone attributes a cause to an eventual outcome**. Discounting in psychology is sometimes intertwined with the augmentation principle, which takes the discounting principle evaluation and then adjusts choices based this.

## What is the indifference point in delay discounting?

**Delay discounting** refers to a decline in the value of a reward when it is **delayed** relative to when it is immediately available. **Delay discounting** tasks are used to identify **indifference points**, which reflect equal preference for two dichotomous reward alternatives differing in both **delay** and magnitude.