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exponential discounting

noun phrase

Reveal meaning and examples

A model that reduces the present value of a future outcome by the same proportional factor for each equal unit of delay.

The graph for exponential discounting applies a constant proportional reduction over equal intervals.

Dictionary practice example.

In her class's exponential discounting model, the value assigned to a future reward fell by the same proportional factor for each additional equal interval of waiting.

From What a Later Reward Is Worth.

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