Inequality aversion, social discount, and time discount rates

Inequality aversion, social discount, and time discount rates

Purpose We conduct a hypothetical dictator game with social distance and time delays using conjoint analysis. Design / methodology / approach Responses from 1,347 Japanese adults are collected through an online survey, and their responses are analyzed using a random parameter logit model. Findings Social preference for the present income of a stranger equals social preference for the income of ...

Corruption, Cooperation and Endogenous Time Discount Rates

Virtually all uses of repeated games to study of cooperation assume that people’s time discount rates are exogenous and fixed. Here we offer an evolutionary game embedded in a multi-period model of investment and consumption in which individual time discounts are determined by their convergence to values determined by Evolutionary Stable Strategies. Our substantive motivation, though, is corrup...

The Social Discount Rate under Intertemporal Risk Aversion and Ambiguity

Following the Stern review of climate change the numerical choice of the social discount rate has been identified as one of the most crucial determinants of optimal policy recommendations for greenhouse gas mitigation policies. In this paper I point out two closely related contributions to the social discount rate in an uncertain world that have been overlooked in the debate. First, the standar...

Discount Rates and Sustainability

Against High Discount Rates

In the economics of climate change, the future benefits of greenhouse gas emissions abatement are commonly discounted at a rate equal to the long-run return on corporate stocks, which averaged 6% per year during the 20 century. Since a 6% discount rate implies that one dollar of benefits obtained one century from the present attains a present value of less than one cent, this method implies tha...