Thus, higher current earnings lower the risk of default by making the expected value of the random
discount factor lower.
Motivated by the above observations, in this paper, we shall focus on the problem of strategic stability of cooperative solutions in ISGs and present sufficient conditions in terms of
discount factors and prove that Nash or strong Nash equilibria exist in such games.
The steady-state
discount factor, p, is set to 0.9957, which equals the average ratio of the GDP implicit price deflator inflation rate to the 3-month T-bill rate.
Fiscal limits are substantially lower in emerging market economies than in advanced economies due to the lower
discount factor. Regardless of productivity level, the probability of default for all four emerging market economies would be 1 at a debt level of 190 percent of GDP; in Japan and the United States, the probability of default would be essentially zero at the same debt level.
Then, let [delta], 0 < [delta] [less than or equal to] 1, refer to the
discount factor, common to the three agents.
The dependent variable: The parent in the tough love model of Bhatt and Ogaki (39) endogenously evaluates the child's time preferences, i.e., the
discount factor. We measure tough love behavior of parents towards young children using the following hypothetical question in the survey.
The selection of appropriate value of
discount factor make sure the future reward.
As one can see from (4) and (5) both the value of the risk-free rate and the size of the risk premium depend on four parameters:
discount factor ([beta]), relative risk aversion ([alpha]) and possible rates of growth of consumption ([g.sub.1] and [g.sub.2]).
3 shows the transmit power comparison between the proposed DDCPC algorithm under different
discount factor r and DCPC algorithm.