Thanks for the thoughtful question, Opher. The answer is that inflation is not taken into account in the model. I believe the effect would be minimal, however, since both inflation and the payout would tend to move together, keeping at least the ordinal structure intact, if not the actual numbers. Like any good model, the first pass is rough, but can be refined by introducing additional real-world wrinkles in later iterations. My feeling was, in this case, that rough justice was sufficient for it to be useful.