What is discount factor gamma?

Updated May 17, 2026

Short answer

Gamma determines importance of future rewards.

Deep explanation

Values near 1 prioritize long-term rewards; near 0 prioritize immediate rewards.

Real-world example

Used in financial trading agents balancing short vs long-term profit.

Common mistakes

  • Setting gamma = 1 causing instability in some environments.

Follow-up questions

  • What happens if gamma = 0?

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