Book Reviews Time Preference
CHOICE OVER TIME, George Loewenstein and Jon Elster (eds), New York: Russell Sage, 1992, 423 pp.,
Review by Peter Wakker
This book collects together a number of contributions by leading experts on time preferences and related topics. My own background is in axiomatic models for decision under uncertainty and time preference is a new and recent interest for me. This book gives a broad overview of the relevant issues, and some deep analyses. It was a perfect introduction into the topic for me. At several places the authors express enthusiasm (front flap: 'Many of our most urgent national problems , . .', p. xxiii: 'With ever greater insistence, American social scientists are being called upon to explain and offer remedies for a broad range of societal problems . . .').
Similar to the field of decision under uncertainty, that is in the stage of 'No to expected utility' without yet a very clear alternative, the field of time preference is in the stage of 'No to constant discounting'. Several chapters d o argue for an alternative, i.e. hyperbolic discounting (receiving $x after time T is worth U(x)/ (k+ T)', where k and r are constants and U is a utility