Table of Contents
1. Hyperbolic Discounting
Human perception of the value diminishes as the event moves farther in the future.
The tendency is captured in the hyperbolic discounting formula. \[ V(t) = \frac{V_0}{1+ kt} \] where \( V_0 \) is the actual value, \( k \) is the discount rate parameter, and \( V \) is the perceived value.