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Evolution of time preference by natural selection

Robson, A.; Szentes, B.; (2009) Evolution of time preference by natural selection. (ELSE Working Papers 326). ESRC Centre for Economic Learning and Social Evolution: London, UK. Green open access

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Abstract

We reexamine Rogers’ (1994) analysis of the biological basis of the rate of time preference. Although his basic insight concerning the derivation of the felicity function holds up, the functional form he uses does not generate the evolutionary equilibrium behavior. Moreover, Rogers relies upon an interior solution for a particular kind of intergenerational transfer. We show such interior solutions do not generally arise. Hence Rogers most striking prediction, namely that the real interest rate should be about 2% per annum, does not follow.

Type: Working / discussion paper
Title: Evolution of time preference by natural selection
Open access status: An open access version is available from UCL Discovery
Publisher version: http://else.econ.ucl.ac.uk/newweb/papers.php#2009
Language: English
Keywords: Biological evolution, rate of time preference, intergenerational transfers
UCL classification: UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/15011
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