Thinking and Deciding

DISCOUNTING 487
bly, in order to get addicted to heroin one must put aside one’s knowledge that trying
it a few times can lead to long-term problems.
The rationality of personal discounting
What should the discount rate be for individuals? We have been assuming that people
should be utterly impartial toward all parts of their future lives. They should be just
as concerned about themselves a year from now as they are about themselves this
minute. Is this right?
We have already noted that temporal impartiality is consistent with some discounting,
because of interest rates and unforeseen events. We might also wish to
take into account the fact that some goods last so long that time to enjoy them may
be shorter if we get them later, because life is finite. Beyond these reasons, there are
no additional general reasons to favor the immediate future over the distant future. In
many cases, such as those studied by Thaler and Shefrin, it can be assumed that only
the interest rate is relevant, to a first approximation. It is therefore fair of Thaler and
Shefrin to conclude that we are probably temporally myopic — that is, more concerned
about the immediate future than we ought to be if we were impartial toward
all parts of our future lives.
What if someone says, “I just don’t care about my future. I care only about the
present, and I dare you to call me irrational for doing so”? Aren’t people free to say
this and to ruin their own future lives if they feel like it?
This issue is not settled. Parfit (1984) has argued that rationality does not in fact
require impartiality toward all parts of one’s future life. He does point out that we
have some reasons for being concerned with our future. Interestingly, some of these
reasons are the same as those that we have for being concerned with other people.
Parfit argues that, in a sense, the “you” that exists ten years from now is not the same
person as “you” today — closely related, perhaps, but not the same. Therefore, your
concern about yourself in ten years might be the same as your concern with someone
very close to you, which might, in turn, not be quite as great as your concern with
yourself at the moment.
Despite Parfit’s reservations, many of us feel a strong pull toward an attitude of
impartiality toward all parts of our future lives. There is certainly nothing irrational
about such an attitude in its own right. If we think of our lives as a whole, we may be
able to form a better plan for each part than if we merely live for the immediate future,
through a kind of cooperation among the different parts for the ultimate benefit of all
parts (Elster, 1985). Of course, such planning requires self-control.
In the case of decisions made for other people, impartiality across time is even
more attractive. If you are concerned about others, altruistically, then you are probably
just as concerned with their future selves as with their present selves. If they are
less concerned with their own futures, you may find yourself intervening to protect
their future selves from the impulsiveness of their present selves. If you are on good
enough terms, you will throw their cigarettes out the window, turn off the television