Social choice for one: On the rationality of intertemporal decisions

Abstract

When faced with an intertemporal choice between a smaller short-term reward and a larger long-term prize, is opting for the latter always indicative of delay tolerance? And is delay tolerance always to be regarded as a manifestation of self-control, and thus as a rational solution to intertemporal dilemmas? I argue in favor of a negative answer to both questions, based on evidence collected in the delay discounting literature. This highlights the need for a nuanced understanding of rationality in intertemporal choice, to capture also situations in which waiting is not the optimal strategy. This paper suggests that such an understanding is fostered by adopting social choice theory as a promising framework to model intertemporal decision making. Some preliminary results of this approach are discussed, and its potential is compared with a much more studied formal model for intertemporal choice, i.e. game theory.

Keywords: Delay; Game theory; Intertemporal choice; Rationality; Self-control; Social choice theory.