We have good reasons to expect biological selection to create high discount rates. But why hasn't cultural selection made orgs (nations, religions, firms, etc) with lower discount rates? Why doesn't patience help orgs win wars, business competition, etc? https://www.aeaweb.org/articles?id=10.1257/mic.4.4.172 …
Wouldn't a low discount org save/invest in future and grow relative to other orgs?
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think a foundation doing live-saving works in africa. There is no positive selection per se on their work, unless people that are going to donate share the low discount rates. Also individuals can't verify if they are right afterwards, because they are dead when it happens
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If the org has a low discount rate and can save, it will save a lot. If it isn't allowed to save, not clear what it means to say it has a low discount rate.
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"Why hasn't cultural selection made orgs with lower discount rates?" Great question. One countervailing force may be that when society changes fast (as it has in recent centuries), old low discount orgs are no longer well-adapted to the new environment
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That suggests low discount orgs have insufficient uncertainty and diversification. Which just raises the question of why cultural selection didn't promote those features, if in fact orgs tend to lack them.
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Yes flexibility - a capacity to adapt to new times: shed views that are no longer acceptable while retaining others, etc. I guess some very old orgs have that capacity to some extent; e.g., many religions
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not necessarily if the low discount organizations don't have a profit motive, or an asset accumulation motive. Also low discount rate doesn't imply higher average profitability of investment, especially when you don't directly accrue the advatages of those investments.
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How can an org have a low discount rate and yet not care about the things it could do in the future with assets it saved?
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total risk-free real rate of return can be estimated as extremely low and so discourage asset-building even with low discount rates
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