How much should we pay attention to events in the distant future?: Implications of the subsequent generation intervention and natural hazard succession for time discount

Abstract

　Arrow (1999) points out that the moral requirement to treat generations impartially is in conflict with the intuition that imposing an excessive savings rate is morally unacceptable (the conflict of basic principles of morality). The key to solving this conflict is that humans are being bound at specific times. When making choices towards the future, we are responsible for the degree to which the choices affect and weight future events according to the degree of responsibility. This is the foundation of the discount that is rooted in the essence of time, which is the succession of events along the sequence, and is the key to solving the conflict of principles of morality. There are two types of discount from the sequence: one is due to the intervention of subsequent generations, and the other comes from the succession of natural hazards. This paper, employing game theoretic models and empirical studies, elucidates the nature of the discount from these two types of sequences.