We now examine the effects of changing the distribution of discount factors
As far as the standard deviation of the stochastic discount factor
is concerned, it can be approximated by
Second, according to Proposition 2, two incumbents still collude at monopoly output in the first period even under low discount factor
([delta] < 9/17) so long as v > 2/3, or v [member of] [1/2, 2/3) but [delta] [greater than or equal to] [[delta].
Thus, exogenous changes in discount factors
play a significant role in generating seasonal cycles in the U.
kt]) is the intertemporal marginal rate of substitution of the investor, also known as the stochastic discount factor
s], and has a constant personal discount factor
Land Rent from Submerged Land Site Used to Calculate Discount Factor
in Submerged Land Discount Factor
The discount factor
should take account of both the interest costs in the market and the normal premium used in discounting equity returns as compared to safer income streams.
Chapter eleven deals with models of term structure of interest rates that, according to the authors, can be viewed as "time series models for the stochastic discount factor
t~ = Managers' risk-adjusted present value discount factor
for period (t).
In order to do this, a cumulative discount factor
or annuity factor must be obtained for three, four and five years.
Suppose Elaine believes herself to be infinitely lived; this is a good approximation in relation to the number of sponges she has and her time discount factor