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Hyperbolic discounting is an alternative mathematical model that agrees more closely with these findings. [5] According to hyperbolic discounting, valuations fall relatively rapidly for earlier delay periods (as in, from now to one week), but then fall more slowly for longer delay periods (for instance, more than a few days).
Hyperbolic motion can be visualized on a Minkowski diagram, where the motion of the accelerating particle is along the -axis.Each hyperbola is defined by = / and = / (with =, =) in equation ().
In economics, a discount function is used in economic models to describe the weights placed on rewards received at different points in time. For example, if time is discrete and utility is time-separable, with the discount function f(t) having a negative first derivative and with c t (or c(t) in continuous time) defined as consumption at time t, total utility from an infinite stream of ...
In mathematics, a hyperbolic partial differential equation of order is a partial differential equation (PDE) that, roughly speaking, has a well-posed initial value problem for the first derivatives. [ citation needed ] More precisely, the Cauchy problem can be locally solved for arbitrary initial data along any non-characteristic hypersurface .
Therefore, the preferences at t = 1 is preserved at t = 2; thus, the exponential discount function demonstrates dynamically consistent preferences over time. For its simplicity, the exponential discounting assumption is the most commonly used in economics. However, alternatives like hyperbolic discounting have more empirical support.
Mathematically, rapidity can be defined as the hyperbolic angle that differentiates two frames of reference in relative motion, each frame being associated with distance and time coordinates. Using the inverse hyperbolic function artanh, the rapidity w corresponding to velocity v is w = artanh(v/c) where c is the speed of light.
A radial hyperbolic trajectory is a non-periodic trajectory on a straight line where the relative speed of the two objects always exceeds the escape velocity. There are two cases: the bodies move away from each other or towards each other. This is a hyperbolic orbit with semi-minor axis = 0 and eccentricity = 1.
Some formulations treat β not as a constant, but as a function β(t) that itself varies over time, for example in models which use the concept of hyperbolic discounting. This view is consistent with empirical observations that humans display inconsistent time preferences .