We can’t jettison hyperbolic discounting if it actually describes the relationship between today-me and tomorrow-me’s preferences. If today-me and tomorrow-me do have different preferences, there is nothing in the theory to say which one is “right.” They simply disagree. Yet each may be well-modeled as a rational agent.
The default fact of the universe is that you aren’t the same agent today as tomorrow. An “agent” is a single entity with one set of preferences who makes unified decisions for himself, but today-you can’t make decisions for tomorrow-you any more than today-you can make decisions for today-me. Even if today-you seems to “make” a decision for tomorrow-you, tomorrow-you can just do something else. When it comes down to it, today-you isn’t the one pulling the trigger tomorrow. It may turn out that you are (approximately) an individual with consistent preferences over time, in which case it’s equivalent to today-you being able to make decisions for tomorrow-you, but if so that would be a very special case.
There are evolutionary pressures that encourage agency and exponential discounting in particular. I have also seen models that tried to generate some evolutionary reason for time inconsistency, but never convincingly. I suspect that really, it’s just plain hard to get all the different instances of a person to behave as a single agent across time, because that’s fundamentally not what people are.
The idea that you are a single agent over time is an illusion supported by inherited memories and altruistic feelings towards your future selves. If you all happen to agree on which one of you should get to eat the donut, I will be surprised.
That is true. But there are also such things as holding another person at gunpoint and ordering them to do something. It doesn’t make them the same person as you. Their preferences are different even if they seem to behave in your interest.
And in either case, you are technically not deciding the other person’s behavior. You are merely realigning their incentives. They still choose for themselves what is the best response to their situation. There is no muscle now-you can flex to directly make tomorrow-you lift his finger, even if you can concoct some scheme to make it optimal for him tomorrow.
In any case, commitment devices don’t threaten the underlying point because most of the time they aren’t available or cost-effective, which means there will still be many instances of behavior that are best described by non-exponential discounting.
We can’t jettison hyperbolic discounting if it actually describes the relationship between today-me and tomorrow-me’s preferences. If today-me and tomorrow-me do have different preferences, there is nothing in the theory to say which one is “right.” They simply disagree. Yet each may be well-modeled as a rational agent.
The default fact of the universe is that you aren’t the same agent today as tomorrow. An “agent” is a single entity with one set of preferences who makes unified decisions for himself, but today-you can’t make decisions for tomorrow-you any more than today-you can make decisions for today-me. Even if today-you seems to “make” a decision for tomorrow-you, tomorrow-you can just do something else. When it comes down to it, today-you isn’t the one pulling the trigger tomorrow. It may turn out that you are (approximately) an individual with consistent preferences over time, in which case it’s equivalent to today-you being able to make decisions for tomorrow-you, but if so that would be a very special case.
There are evolutionary pressures that encourage agency and exponential discounting in particular. I have also seen models that tried to generate some evolutionary reason for time inconsistency, but never convincingly. I suspect that really, it’s just plain hard to get all the different instances of a person to behave as a single agent across time, because that’s fundamentally not what people are.
The idea that you are a single agent over time is an illusion supported by inherited memories and altruistic feelings towards your future selves. If you all happen to agree on which one of you should get to eat the donut, I will be surprised.
There are such things as commitment devices.
That is true. But there are also such things as holding another person at gunpoint and ordering them to do something. It doesn’t make them the same person as you. Their preferences are different even if they seem to behave in your interest.
And in either case, you are technically not deciding the other person’s behavior. You are merely realigning their incentives. They still choose for themselves what is the best response to their situation. There is no muscle now-you can flex to directly make tomorrow-you lift his finger, even if you can concoct some scheme to make it optimal for him tomorrow.
In any case, commitment devices don’t threaten the underlying point because most of the time they aren’t available or cost-effective, which means there will still be many instances of behavior that are best described by non-exponential discounting.