Social Discounting Participants completed a social discounting task (Jones & Rachlin, 2006) in which they were asked to make choices between a hypothetical amount of money to keep for themselves and a hypothetical amount of money to share with a person of a given level of social proximity.
Social discounting was estimated by calculating the area under the curve (AUC) for each participant using the seven indifference points with an ordinal scaling transformation (i.e., [AUC.sub.ord]; Borges, Kuang, Milhorn, & Yi, 2016).
But smaller businesses should have carefully calculated strategies for discounting so it's not done thoughtlessly with a disregard for margins or retaliatory action by irate competitors.
If you are in a service or other retail business carefully evaluate the need for discounting and its long-term effect.
Economics has traditionally assumed that the shape of the discounting
function was exponential; that is, for each unit of time that constitutes the delay to delivery, the value of a reward decreases, or is discounted, by a fixed proportion (Kirby, 1997).
Dagbojartsson, "Market Discounting
of Partial Ownership Interests," The Appraisal journal (October 1994): 535-541.
Specifically, the EITF proposed estimating the current market value of assets expected to be sold by first predicting a future market value and then discounting
it back to a present value.
Table : Discounting
Benefits and Costs: Hypothetical
There has also been debate in the research literature as to whether the two types of discounting
might be distinct from one another (e.g., Green and Myerson 2004; Rachlin et al.
While the EOP frequency produces a deeper discount of value, BOP discounting
further enriches it.
The Board members selected three Class C directors for each of the 12 Reserve Banks (the Class A and Class B directors were elected by the member banks in each Reserve District); drafted uniform bylaws for the Reserve Banks; dealt with staffing and housing the Reserve Banks; oversaw the design and printing of the new Federal Reserve notes; supervised the transfer of gold reserves to the Reserve Banks from the subtreasuries; set guidelines for the types of paper that were eligible for discounting
by the Reserve Banks; and worked out a mechanism for discounting
Researchers have been interested in rates of discounting
for a number of reasons.