Description
Return quasi-hyperbolic discounted reward and present-bias difference.
Decision models distinguish monetary payoffs, probabilities, model values and subjective equivalents. Discounting, probability weighting and reference-dependent utility terms depend on supplied parameters and cannot by themselves establish actual preferences or an appropriate allocation.
Return quasi-hyperbolic discounted reward and present-bias difference.
When to use this tool
Use Quasi Hyperbolic Present Premium Term when evaluating the stated decision-model, lottery or discount contribution.
How to use the tool and how it works
- Enter amount, beta, delta, periods. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read discounted, exponentialOnly, presentBiasDiscount. Use the output convention below.
Return quasi-hyperbolic discounted reward and present-bias difference. Require amount >= 0, beta/delta in [0,1] and whole periods >= 0; at zero return amount, otherwise amount*beta*delta^periods, and compare with exponential-only amount*delta^periods.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| amount | Amount | Required. Finite number; minimum 0. |
| beta | Beta | Required. Finite number; minimum 0; maximum 1. |
| delta | Delta | Required. Finite number; minimum 0; maximum 1. |
| periods | Periods | Required. Safe integer; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| discounted | Discounted | Required. Finite number. |
| exponentialOnly | Exponential Only | Required. Finite number. |
| presentBiasDiscount | Present Bias Discount | Required. Finite number. |
{
"input": {
"amount": 100,
"beta": 0.8,
"delta": 0.5,
"periods": 2
},
"output": {
"discounted": 20,
"exponentialOnly": 25,
"presentBiasDiscount": 4.999999999999999
}
}Limitations and assumptions
- At zero periods the present-bias difference is zero; parameters and period units are supplied, not fitted to behavior.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Fit and validate an appropriate complete decision model against relevant observations; distinguish model scores from money and assess actual financial choices separately.
References
Similar or alternative tools
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