This paper estimates the degree of the exponential-function misvaluation, its variation with given product price level, and its expected growth rate. The paper examines whether other mathematical functions, such as linear, quadratic and cubic functions, conform to the discounting and compounding...

Kariya and Tsuda (1994) proposed the TDM (Time Dependent Markov) bond pricing model and showed that it is of great in-sample performance. In less than 0.5 yen in each month over 12 years, implying that the error rate is less than 0.5%. In addition, Kariya and Tsuda (1996) demonstrated the...