Journal Article
Evolution of Time Preference by Natural Selection
Alan R. Rogers
The American Economic Review
Vol. 84, No. 3 (Jun., 1994), pp. 460-481
Published
by: American Economic Association
https://www.jstor.org/stable/2118062
Page Count: 22
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Topics: Ecological competition, Age, Biological altruism, Marginal rate of substitution, Alleles, Mortality, Marginal utility, Descendants, Natural selection
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Abstract
This paper entertains the hypothesis that human time preferences are in evolutionary equilibrium (i.e. that no mutation changing time preferences could be favored by natural selection). This hypothesis implies that the marginal rate of substitution (MRS) holding Darwinian fitness constant must equal the MRS holding utility constant. Furthermore, in a market economy the latter must equal the MRS in exchange. Exploiting these principles, I find that the long-term real interest rate should equal ln(2) per generation (about 2 percent per year) and that young adults should discount the future more rapidly than their elders.
The American Economic Review © 1994 American Economic Association
