The Evolution of Time Preference with Aggregate Uncertainty

We examine the evolutionary foundations of intertemporal preferences. When all the risk affecting survival and reproduction is idiosyncratic, evolution selects for agents who maximize the discounted sum of expected utility, discounting at the sum of the population growth rate and the mortality rate....

Full description

Saved in:
Bibliographic Details
Published in:The American economic review 2009-12, Vol.99 (5), p.1925-1953
Main Authors: Robson, Arthur J., Samuelson, Larry
Format: Article
Language:English
Subjects:
Age
Aggregate analysis
Behavioral economics
Bias
Discount rates
Discounting
Economic growth rate
Eigenvalues
Evolution
Evolutionary economics
Expected utility
Hunter-gatherers
Marginal rate of substitution
Microeconomics
Mortality
Population growth
Population growth rate
Preferences
Random variables
Studies
Survival rates
Time
Uncertainty
Utility functions
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:We examine the evolutionary foundations of intertemporal preferences. When all the risk affecting survival and reproduction is idiosyncratic, evolution selects for agents who maximize the discounted sum of expected utility, discounting at the sum of the population growth rate and the mortality rate. Aggregate uncertainty concerning survival rates leads to discount rates that exceed the sum of population growth rate and death rate, and can push agents away from exponential discounting.
ISSN:0002-8282
1944-7981
DOI:10.1257/aer.99.5.1925