Re: Market failure to sufficently weigh the future

From: Nick Bostrom (
Date: Wed Nov 01 2000 - 19:05:03 MST

Hal wrote:

>It also appears to me that the authors have not tried to separate
>discounting from issues of uncertainty about the future, as when they
>: Beyond revealed preference, the strongest theoretical argument in
>: favor of discounting, involves what Bohm-Bawerk referred to as the
>: "brevity and uncertainty of human life." According to this view,
>: people discount future felicity because they may not be around to
>: enjoy it. An individual weighs pleasures at date t by the conditional
>: probability of living until date t.
>Rather than factoring out uncertainty, they propose uncertainty as a
>theoretical justification for discounting.

I think the authors are making a mistake here. To the extent that
"discounting the future" is merely a matter of weighing in the risk that
things could go wrong before we reap the harvest on our investments, then
their arguments don't show that dictatorship of the moment leads to
suboptimal total preference satisfaction. Any benevolent social planner
would also have to take that risk into account. This is an epistemic matter
("we don't know the future") rather than a matter of incentives ("we care
too much about the present to freely optimize total preference satisfaction").

Dr. Nick Bostrom
Department of Philosophy
Yale University

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