The effect of a constant or a declining discount rate on optimal investment timing
This 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.
Volume (Year): 10 (2003)
Issue (Month): 10 ()
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- Cropper, Maureen & Laibson, David, 1998. "The implications of hyperbolic discounting for project evaluation," Policy Research Working Paper Series 1943, The World Bank.
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