- Economists usually regard time preference as they view any other type of preference. A preference for current utility over future utility is treated like the preference for an apple over an orange – an issue of personal taste, whose rationality cannot be disputed. There is an important difference, however. Choosing an apple over an orange is compatible with utility maximization: While one cannot be certain that the apple conferred more utility than the orange, it seems reasonable to assume so. Such an assumption is not tenable in the case of time preference: someone who chooses a smaller amount of utility now over a greater amount in some future period is clearly not maximizing utility over that interval.
- Because time preference runs counter to utility maximization, it requires more justification than other types of preferences. Many have argued that no such justification can be found; that there is no good reason to care less about future utility than current utility (see, e.g., Jevons 1871; Sidgwick, 1874; Pigou, 1920; Ramsey, 1928; Lewis, 1946; Rawls, 1971; Elster 1986; Broome, 1991). Those who advocate temporal neutrality argue that one should want their life, as a whole, to go as well as possible, and that counting some parts of life more than others interferes with this goal. On this view, it is irrational to prefer a smaller immediate pleasure over a greater future pleasure (or a greater future pain over a smaller immediate pain), because now and later are equally parts of one life, and choosing the smaller good or the greater bad reduces the quality of one's life, as a whole.
- The belief that a person should weight all utility the same, regardless of its temporal position implicitly assumes that all parts of one's future are equally parts of oneself; that there is a single, enduring, irreducible entity to whom all future utility can be ascribed. However, some philosophers – most notably Derek Parfit (1971, 1984) – deny this assumption. They argue that a person is nothing more than a succession of overlapping selves related to varying degrees by physical continuities, memories, and similarities of character and interests. On this view, the separation between selves may be just as significant as the separation between persons, and discounting one's "own" future utility may be no more irrational than discounting the utility of someone else.
- To illustrate this argument with an extreme example1, consider the plight of Seth Brundle, the main character in the movie "The Fly." In a scientific experiment gone awry, Seth becomes genetically fused with a housefly and gradually metamorphoses2 into "Brundlefly" (a human-fly hybrid). Under these exceptional circumstances, it seems rational for Seth to discount "his" future utility – to give less weight (perhaps no weight at all) to the future utility of Brundlefly.
- The foregoing example lends credibility to the idea that it could, at least under some circumstances, be rational to discount future utility. Of course, it leaves open the questions of exactly which types of changes justify diminished concern for future selves and what degree of discounting might ordinarily be appropriate.
- This chapter will explore these issues in two different contexts.
- Section 2 summarizes philosophical positions on the nature of personal identity and sketches the most common philosophical critiques of Parfit’s3 view.
- Section 3 presents a descriptive study that assesses individual’s perceptions about the intertemporal stability of their identity, and assesses whether these perceptions can account for interpersonal variability in implicit discount rates.
- Section 4 concludes.
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