The curved lines represent hyperbolic discounting functions (Equation 1), fitted to the median data of deflationary (k = 0.021, [R.sup.2] = 0.146), zero-inflationary (k = 0.021, [R.sup.2] = 0.408), and inflationary (k = 0.037, [R.sup.2] < 0) conditions.
The areas under the curve for objective discounting, calculated from the exponential discounting curve, are 0.616 for the inflationary condition, 0.715 for the zero-inflationary condition, and 0.84 for the deflationary condition.
These results suggest that different combinations of nominal interest and inflation rates yielding the same real interest rate have an effect on the discounting of delayed rewards, but that the effect is not strong.
The results of the three experiments suggest that the subjective discounting of delayed rewards is strongly affected both by inflation and interest rates.
The nominal interest rate also affected delay discounting (Experiment 2).
Different combinations of inflation and nominal interest rates that yielded the same real interest rate also had some effect on delay discounting (Experiment 3).
The results of this study have implications for the relationship between individual discounting and market discounting.
The present results, however, show that individual subjective discounting is also affected by macroeconomic factors (interest and inflation rates).
Thus, the results of delay discounting experiments from different countries and times should not be compared lightly; neglecting macroeconomic factors may yield misleading conclusions regarding the behavior of participants.
Moreover, the term structure of subjective discounting is different from that of market discounting.
Macroeconomic factors only affect some parameters and outcomes in delay discounting experiments.
In the experiments conducted for this study, delay length and the indirect relation between the rewards provided and actual Japanese yen payments may limit the degree to which the delay discounting behavior observed can be generalized.