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The evolution of hyperbolic discounting: Implications for truly social valuation of the future

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  • Gowdy, John
  • Rosser, J. Barkley
  • Roy, Loraine

Abstract

We explore the standard expected utility model and alternatives to it. We then examine the behavioral and neurological evidence for hyperbolic discounting. We discuss evidence related to the neurological and behavioral evolution of discounting in non-human animals and in humans. We explore new findings about the importance of sociality in human behavior and the implications for truly social time preference. Finally, we discuss the implications of the neurological evidence on discounting for social environmental valuation, in particular the implications for very long-run decisions such as those involved in climate change mitigation and biodiversity preservation.

Suggested Citation

  • Gowdy, John & Rosser, J. Barkley & Roy, Loraine, 2013. "The evolution of hyperbolic discounting: Implications for truly social valuation of the future," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages 94-104.
    • Handle: RePEc:eee:jeborg:v:90:y:2013:i:s:p:s94-s104
    DOI: 10.1016/j.jebo.2012.12.013
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    More about this item

    Keywords

    Behavioral evolution; Discounted utility; Hernnstein's matching law; Hyperbolic discounting; Neuroeconomics; Social time preference;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D60 - Microeconomics - - Welfare Economics - - - General
    • D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate

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