American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Evolution of Time Preference by Natural Selection: Comment
American Economic Review
vol. 98,
no. 3, June 2008
(pp. 1178–88)
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.Citation
Robson, Arthur J., and Balazs Szentes. 2008. "Evolution of Time Preference by Natural Selection: Comment." American Economic Review, 98 (3): 1178–88. DOI: 10.1257/aer.98.3.1178Additional Materials
JEL Classification
- D11 Consumer Economics: Theory
- D15 Intertemporal Consumer Choice; Life Cycle Models and Saving