Re: Market failure to sufficently weigh the future

From: Robin Hanson (
Date: Wed Nov 01 2000 - 08:35:19 MST

Hal Finney wrote:
>... We like sugar and we discount the future for the
>same reason, because it was a good strategy for our ancestors to follow.
>... I suggest that if we could somehow imagine creatures
>evolving in a situation where there was no uncertainty, and goods saved
>would be guaranteed to be available in the future, those creatures would
>not discount the future.... is discounting ... a matter of taste only,
>or is it exogenous, determined by outside conditions and external
>constraints? ... If the latter, proposals to artificially change
>discount rates must cause inefficiencies and impose costs.

I can't follow your argument. Yes of course our preferences evolved to
be adaptive to our ancestors' environment. And if so then artificially
changing our actions, relative to those we prefer, would make us less
adaptive if we were still in our ancestors' environment.

But you seem to accept that our environment has changed greatly since
our preferences evolved. And the paper isn't about what is adaptive
anyway - it is about what would satisfy the preferences we have, however
we got them and however adaptive they are.

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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