No discounting as a moral virtue in intertemporal choice models

Author: Vipul Bhatt
Date: 2014/8
No: DP2014-003
JEL Classification codes: D91, H43, E03
Language: English
[ Abstract / Highlights ]

Should we discount our own future or should we apply an equal concern to all parts of our life? Many moral philosophers regard no discounting as a virtue. We present arguments on both sides of this debate. A critical comparison of the two conflicting viewpoints on the issue of discounting yields two conclusions. First, no discounting may have undesirable implications in certain economic settings and is often inconsistent with observed individual behavior. Although important in its own right, such an argument falls short of providing a moral basis for discounting. Second, from a normative perspective, there is a strong ethical foundation for no discounting in models of intertemporal choice.