Thursday, December 4, 2008

We are impatient because our brains are schizophrenic

There is ample evidence that humans are impatient. The traditional assumption in Economics has been to assume that we have preferences that exogenously feature a discount factor. Isabelle Brocas and Juan Castillo claim to explain endogenously impatience by thinking about how the brain functions.

Essentially, the brain is composed of competing entities. Say that there is a principal maximizing undiscounted intertemporal utility on a finite horizon. Then, there are distinct agents in each periods, all myopic in the sense that only contemporaneous utility matters. The principal can impose choices on agents, but the latter have private information on marginal utilities. The problem is closed with an intertemporal budget constraint with a strictly positive interest rate.

Impatience emerges as a result of this asymmetric information. Each agent has independent valuation, so there is no information to be gained from one agent that would be useful on the others. However, the principal can elicit some valuation revelation by granting more immediate utility to the agent. Thus, impatience is the result of asymmetric information between the principal and the independent agents.

In the particular implementation of this problem, the only intertemporal binding is the interest rate. This is the reason why the principal wants some savings. In the model, this positive interest rate is exogenously imposed. If it is zero, there is no impatience. Then, why would the interest rate be positive in the first place? Isn't it to reward patience among impatients? Aren't we going in circles here?


Anonymous said...

What school are you at? I want to take your classes!

Anonymous said...

black mold exposureblack mold symptoms of exposurewrought iron garden gatesiron garden gates find them herefine thin hair hairstylessearch hair styles for fine thin hairnight vision binocularsbuy night vision binocularslipitor reactionslipitor allergic reactionsluxury beach resort in the philippines

afordable beach resorts in the philippineshomeopathy for big with great mineral makeup bargainsmineral makeup wholesalersprodam iphone Apple prodam iphone prahacect iphone manualmanual for P 168 iphonefero 52 binocularsnight vision Fero 52 binocularsThe best night vision binoculars here

night vision binoculars bargainsfree photo albums computer programsfree software to make photo albumsfree tax formsprintable tax forms for free craftmatic air bedcraftmatic air bed adjustable info hereboyd air bedboyd night air bed lowest pricefind air beds in wisconsinbest air beds in wisconsincloud air beds

best cloud inflatable air bedssealy air beds portableportables air bedsrv luggage racksaluminum made rv luggage racksair bed raisedbest form raised air bedsbed air informercialsbest informercials bed airmattress sized air beds

bestair bed mattress antique doorknobsantique doorknob identification tipsdvd player troubleshootingtroubleshooting with the dvd playerflat panel television lcd vs plasmaflat panel lcd television versus plasma pic the bestadjustable bed air foam The best bed air foam

hoof prints antique equestrian printsantique hoof prints equestrian printsBuy air bedadjustablebuy the best adjustable air bedsair beds canadian storesCanadian stores for air beds

migraine causemigraine treatments floridaflorida headache clinicdrying dessicantair drying dessicantdessicant air dryerpediatric asthmaasthma specialistasthma children specialistcarpet cleaning dallas txcarpet cleaners dallascarpet cleaning dallas

vero beach vacationvero beach vacationsbeach vacation homes veroms beach vacationsms beach vacationms beach condosmaui beach vacationmaui beach vacationsmaui beach clubbeach vacationsyour beach vacationscheap beach vacations

bob hairstylebob haircutsbob layeredpob hairstylebobbedclassic bobCare for Curly HairTips for Curly Haircurly hair12r 22.5 best pricetires truck bustires 12r 22.5

washington new housenew house houstonnew house san antonionew house venturanew houston house houston house txstains removal dyestains removal clothesstains removalteeth whiteningteeth whiteningbright teeth

jennifer grey nosejennifer nose jobscalebrities nose jobsWomen with Big NosesWomen hairstylesBig Nose Women, hairstyles