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Evolution of Time Preference by Natural Selection: Comment

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  • Arthur J. Robson
  • Balazs Szentes

Abstract

We reexamine Alan R. Rogers' (1994) analysis of the biological basis of the rate of time preference. Although his basic insight concerning the derivation of the utility function holds up, the functional form he uses does not generate equilibrium evolutionary behavior. Moreover, Rogers relies upon an interior solution for a particular kind of intergenerational transfer. We show such interior solutions need not generally arise. Hence Rogers most striking prediction, namely that the real interest rate should be about 2 percent per annum, does not follow.

Suggested Citation

  • Arthur J. Robson & Balazs Szentes, 2008. "Evolution of Time Preference by Natural Selection: Comment," American Economic Review, American Economic Association, vol. 98(3), pages 1178-1188, June.
  • Handle: RePEc:aea:aecrev:v:98:y:2008:i:3:p:1178-88 Note: DOI: 10.1257/aer.98.3.1178
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    References listed on IDEAS

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    3. Karni, Edi & Schmeidler, David, 1991. "Atemporal dynamic consistency and expected utility theory," Journal of Economic Theory, Elsevier, vol. 54(2), pages 401-408, August.
    4. Gary S. Becker & Casey B. Mulligan, 1997. "The Endogenous Determination of Time Preference," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 729-758.
    5. David Laibson, 1997. "Golden Eggs and Hyperbolic Discounting," The Quarterly Journal of Economics, Oxford University Press, vol. 112(2), pages 443-478.
    6. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    7. George Loewenstein & Drazen Prelec, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 573-597.
    8. Mas-Colell, Andreu & Whinston, Michael D. & Green, Jerry R., 1995. "Microeconomic Theory," OUP Catalogue, Oxford University Press, number 9780195102680.
    9. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, Oxford University Press, vol. 75(4), pages 643-669.
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Luis Rayo & Arthur J. Robson, 2013. "Biology and the Arguments of Utility," Levine's Working Paper Archive 786969000000000787, David K. Levine.
    2. Arthur J. Robson & Larry Samuelson, 2009. "The Evolution of Time Preference with Aggregate Uncertainty," American Economic Review, American Economic Association, pages 1925-1953.
    3. Collins, Jason & Baer, Boris & Weber, Ernst Juerg, 2014. "Economic Growth And Evolution: Parental Preference For Quality And Quantity Of Offspring," Macroeconomic Dynamics, Cambridge University Press, vol. 18(08), pages 1773-1796, December.
    4. Cyrus Chu, C.Y. & Chien, Hung-Ken & Lee, Ronald D., 2010. "The evolutionary theory of time preferences and intergenerational transfers," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 451-464, December.
    5. Arthur Robson & Larry Samuelson, 2008. "The Evolution of Decision and Experienced Utilities," Cowles Foundation Discussion Papers 1678, Cowles Foundation for Research in Economics, Yale University, revised Feb 2010.
    6. Arthur J. Robson & Larry Samuelson, 2009. "The Evolution of Time Preference with Aggregate Uncertainty," American Economic Review, American Economic Association, pages 1925-1953.
    7. Jason Collins & Boris Baer & Ernst Weber, 2015. "Sexual selection, conspicuous consumption and economic growth," Journal of Bioeconomics, Springer, pages 189-206.
    8. Jason Collins & Boris Baer & Ernst Weber, 2015. "Sexual selection, conspicuous consumption and economic growth," Journal of Bioeconomics, Springer, pages 189-206.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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