Hyperbolic Discounting CR Frederick, Loewenstein and O Donoghue(2002, JEL): given two similar rewards, humans show a preference for one that arrives sooner rather than later, but valuations fall very rapidly for small delay periods, but then fall slowly for longer delay periods 1.0 k10 0.8 0.8 50.6 0.6 0.4 04 02 0.2 0.0 0 5 15 time horizon(years) time horizon (years) igure la. Discount Factor as a Function of Time Figure lb. Discount Factor as a Function of Time Horizon(all studies Horizon(studies with avg horizons I year  Frederick, Loewenstein and O’Donoghue (2002, JEL): given two similar rewards, humans show a preference for one that arrives sooner rather than later, but valuations fall very rapidly for small delay periods, but then fall slowly for longer delay periods Hyperbolic Discounting