discount factor


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discount factor

[′dis‚kau̇nt ‚fak·tər]
(petroleum engineering)
The ratio of the present worth of one or a series of future payments to the total undiscounted amount of such future payments. Also known as average discount factor; deferment factor; present-worth factor.
References in periodicals archive ?
f]) and risk premium for different values of the parameters describing discount factor ([beta]) and risk aversion ([alpha]).
In the benchmark scenario, we also assume that the utility function is logarithmic and additively separable, and the distribution of discount factors is uniform.
For example, in the case where the discount factor is set to 0.
We assume that, in the second period, individuals choose the lottery with the highest expected utility, from the point of view of their alcohol discount factor [delta](a).
The rationale for why the stochastic discount factor is much larger in the peso state than in the non-peso states is as follows.
We follow their approach and introduce shocks to the preference discount factor as follows: for 1993 to 1995, 2%, 1%, and 1%, respectively and for 1999, 2%.
We consider bidders to be "impatient" if the discount factor falls below the critical discount factor.
The coefficient is a discount factor that brings back to t (present value) that $1 in t+1.
Finally, equilibrium prices, profits, innovation, and consumer surplus are all increasing in the consumer's discount factor.
where [RHO] (s) denotes the current price of an asset in state s; x (s) denotes the payments delivered by the asset in state s; and m (s, s') denotes the stochastic discount factor from state s today to state s' tomorrow, that is, the function that is, the function that determines the equivalence between current period dollars in state s and next period dollars in state s'.
Section V presents discount factor tables and describes a supporting document for one of the standards.
A long list of empirical failures called puzzles come from applying the stochastic discount factor implied by that Euler equation.