The Evolution of Time Preference with Aggregate Uncertainty

Arthur Robson and Larry Samuelson

American Economic Review, 2009, vol. 99, issue 5, 1925-53

Abstract: 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. (JEL D11, D81, D91)

JEL-codes: D11 D81 D91 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/aer.99.5.1925
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Citations: View citations in EconPapers (33)

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