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The Normative Standard for Future Discounting

Callender, Craig (2018) The Normative Standard for Future Discounting. [Preprint]

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Abstract

Exponential discounted utility theory provides the normative standard for future discounting as it is employed throughout the social sciences. Tracing the justification for this standard through economics, philosophy and psychology, I’ll make what I believe is the best case one can for it, showing how a non-arbitrariness assumption and a dominance argument together imply that discounting ought to be exponential. Ultimately, however, I don’t find the case compelling, as I believe it is deeply flawed. Non-exponential temporal discounting is often rational–indeed, the paragon of rationality. If this is correct, it’s an important point when considering policy interventions. Instead of trying to “fix” non-exponetial discounting because it is irrational and associated with negative life outcomes, we might instead focus attention on why the conditions obtain that make such discounting rational.


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Item Type: Preprint
Creators:
CreatorsEmailORCID
Callender, Craigccallender@ucsd.edu
Keywords: future discounting, exponential, rational choice, social science, hyperbolic, time preference
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
General Issues > Ethical Issues
Specific Sciences > Psychology
General Issues > Science and Policy
Depositing User: Craig Callender
Date Deposited: 13 Dec 2018 20:49
Last Modified: 13 Dec 2018 20:49
Item ID: 15451
Subjects: General Issues > Decision Theory
Specific Sciences > Economics
General Issues > Ethical Issues
Specific Sciences > Psychology
General Issues > Science and Policy
Date: 13 December 2018
URI: http://philsci-archive.pitt.edu/id/eprint/15451

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