In Reply to: Re: slaves and discount rates? posted by Alexandra Polly on October 7, 2001 at 18:30:17:
It depend on how much money the slave master expects to get out of the slaves in the future. If the slave work hard in the future then he is worth more today. If the slave doesn't work hard then he is worth less. But if the slave is expected that he might escape then this makes the risk higher and so the money in the future is less certain. That's why the discount rate is higher. The slave master needs to get more percentage return because the slave might escape. He would also think this way if he think the slave might die in the future.
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