Possibility of Dying as a Unified Explanation of Why We Discount the Future, Get Weaker with Age, and Display Risk‐Aversion
6 Pages Posted: 21 Sep 2011
Date Written: October 2011
I formulate a simple and parsimonious evolutionary model that shows that because most species face a possibility of dying because of external factors, called extrinsic mortality in the biology literature, it can simultaneously explain (a) why we discount the future, (b) get weaker with age, and (c) display risk‐aversion. The paper suggests that testable restrictions - across species, across time, or across genders - among time preference, aging, and risk‐aversion could be analyzed in a simple framework.
JEL Classification: A10, D90
Suggested Citation: Suggested Citation