Re: Market failure to sufficently weigh the future?

From: Robin Hanson (
Date: Wed Nov 01 2000 - 07:03:03 MST

Hal Finney wrote:
>Another part of the paper that I disagree with is sections 4.2 and 4.3,
>on procrastination and addiction.
>... discounting as typically understood cannot
>be considered to play a significant role in these phenomena.
>The problem is simply that the time frame is too short ...
>Now, you could probably come up with a model that would work for this,
>but it would not involve exponential discounting.
>... I think this model would be inconsistent with results
>from economic experiments which show more moderate discount rates.

That paper is just referring to a large economic literature that does
try to explain procrastination via non-exponential discounting.
A common model is "hyperbolic" discounting. If you could persuasively
show such models to be inconsistent with experiments, you could publish
that and win fame among economists. So far such models do a reasonable
job of accounting for a wide range of otherwise puzzling phenomena.
(I really do think you want to become an economist Hal :-).

Robin Hanson
Asst. Prof. Economics, George Mason University
MSN 1D3, Carow Hall, Fairfax VA 22030-4444
703-993-2326 FAX: 703-993-2323

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