Myopia, Hyperbolic Discounting, and Mental Time Travel: Evolutionary Accounts of Lifetime Decisions
Myopia, Hyperbolic Discounting, and Mental Time Travel: Evolutionary Accounts of Lifetime Decisions
Humans are very bad at making choices between outcomes that occur at different points in time; however we do have the capacity to improve our intertemporal choices by making “commitment” responses that reduce our scope for choice in situations where we would choose badly. Both of these facts can be explained by the theory of hyperbolic discounting. This theory was derived from experiments on animal choice in the operant psychology laboratory, and it has firm evolutionary foundations. However, the author argues that there are several reasons why predictions from such experiments may not be valid for humans making choices whose consequences extend over a lifetime. Such choices might be made with the help of instinctual capacities to make choices between life-history strategies, which humans have to make in the area of reproductive rate, or they might depend on general cognitive mechanisms such as our capacity for mental time travel. There is no reason to expect either mechanism to be well adapted for making optimal economic choices. Furthermore, in humans, either conditioning principles or more reflective mechanisms may be responsible for our choices, and it requires mental effort to make more reflective choices. A broadly evolutionary position therefore predicts that human intertemporal choice will have no general tendency to be optimal
Keywords: Intertemporal choice, Theory of hyperbolic discounting, Evolutionary psychology
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