A Biological Theory of Social Discounting
We consider a growth model in which intergenerational transfers are made via stocks of private and public capital. Private capital is the outcome of individuals' private savings while decisions regarding public capital are made collectively. We hypothesize that private saving choices evolve through individual selection while public saving decisions are the result of group selection. The main result of the paper is that the equilibrium rate of return to private capital is at least 2-3% more than the rate of return to public capital. In other words, social choices involving intertemporal trade-offs exhibit much more patience than individual choices do.
Volume (Year): 104 (2014)
Issue (Month): 11 (November)
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- Arthur J. Robson & Balazs Szentes & Emil Iantchev, 2012. "The Evolutionary Basis of Time Preference: Intergenerational Transfers and Sex," American Economic Journal: Microeconomics, American Economic Association, vol. 4(4), pages 172-201, November. Full references (including those not matched with items on IDEAS)
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