Evolution of time preference by natural selection

We reexamine Rogers’ (1994) analysis of the biological basis of the rate of time preference. Although his basic insight concerning the derivation of the felicity function holds up, the functional form he uses does not generate the evolutionary equilibrium behavior. Moreover, Rogers relies upon an interior solution for a particular kind of intergenerational transfer. We show such interior solutions do not generally arise. Hence Rogers most striking prediction, namely that the real interest rate should be about 2% per annum, does not follow.