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POSSIBILITY OF DYING AS A UNIFIED EXPLANATION OF WHY WE DISCOUNT THE FUTURE, GET WEAKER WITH AGE, AND DISPLAY RISK‐AVERSION
Author(s) -
CHOWDHRY BHAGWAN
Publication year - 2011
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2009.00271.x
Subject(s) - preference , risk aversion (psychology) , time preference , economics , simple (philosophy) , face (sociological concept) , econometrics , microeconomics , mathematical economics , expected utility hypothesis , sociology , social science , philosophy , epistemology
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 A10, D90).