Hyperbolic versus exponential discounting
The red lines show hyperbolic discounting. The green lines show exponential discounting (constant discount rate).
Present Value (PV)
Time
Discount rate (exponential)
Discount Rate
Time
![Creative Commons License](https://creativecommons.org/images/public/somerights20.png)
This page by Martin Poulter of the Economics Network is released under a Creative Commons Attribution licence.
See also Hyperbolic discounting and preference reversal