The effect of a constant or a declining discount rate on optimal investment timing
AbstractThis paper shows that exponential discounting may have an advancing effect on the timing of investment, not captured by sensitivity analysis carried out for the complete range of instantaneous discount rates implicit in declining discounting.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Applied Economics Letters.
Volume (Year): 10 (2003)
Issue (Month): 10 ()
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Web page: http://www.tandfonline.com/RAEL20
Other versions of this item:
- Gonzalo Edwards, 2002. "The Effect of a Constant or a Declining Discount Rate on Optimal Investment Timing," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad CatÃ³lica de Chile. 227, Instituto de Economia. Pontificia Universidad CatÃ³lica de Chile..
- D90 - Microeconomics - - Intertemporal Choice - - - General
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pizer, William & Newell, Richard, 2000.
"Discounting the Distant Future: How Much Do Uncertain Rates Increase Valuations?,"
Discussion Papers, Resources For the Future
dp-00-45, Resources For the Future.
- Newell, Richard G. & Pizer, William A., 2003. "Discounting the distant future: how much do uncertain rates increase valuations?," Journal of Environmental Economics and Management, Elsevier, vol. 46(1), pages 52-71, July.
- Cropper, Maureen & Laibson, David, 1998. "The implications of hyperbolic discounting for project evaluation," Policy Research Working Paper Series 1943, The World Bank.
- Martin L. Weitzman, 1998.
Harvard Institute of Economic Research Working Papers
1843, Harvard - Institute of Economic Research.
- Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
- Gonzalo Edwards, 2002. "La Tasa de Descuento en Proyectos de Largo Plazo," Documentos de Trabajo, Instituto de Economia. Pontificia Universidad CatÃ³lica de Chile. 231, Instituto de Economia. Pontificia Universidad CatÃ³lica de Chile..
- Joseph Eisenhauer & Luigi Ventura, 2006. "The prevalence of hyperbolic discounting: some European evidence," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(11), pages 1223-1234.
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