No. Of course not. In simpatico. Just random commentary on my part.

Constant discounting (standard economics) makes sense if you have all possible risks modeled, hyperbolic makes sense if there are unknown risks that will produce an accumulation of uncertainty the further down the road you go....

Not if its chaotic.

plz explain

Modeling all factors doesn't help if you cant measure the current situation well enough to know your trajectory. People who appear to have the same risks will in fact have totally different risks.

Sorry if this is besides the point, wasn't really following the conversation

It makes sense, but it isn't how people work.

Also, some risks are accumulative over time. Risk of war or revolution, for instance.

As are the risks of adverse effects of alcohol. Haven't felt this good for a long time.

yes it is

most ppl don't asses risk good and most ppl evolutionary have a high aversity to risk because of large unknown risks and unknown occurrence of those risks

thus based on the information they have the correct strategy is a highly discounting hyperbolic function

they are wrong not in the function they use but the information they have or to be precise, market is inefficient bcs ppl don't price in new information* that is available and don't correct the slope of their function

* like the insurance industry does.....

a lot of firms are wrong to use constant discount rate simply bcs there is always some risk out there that is unknown, and given the past results most firms that stood the time (but used constant discount rate ) have been bailed out by the gov (fannie mae) or are in bed with it as a long term relationship (Shell)

think about it, I'm pretty sure I'm right

I can't asses the validity of your point

I'm slipping in the chaos theory so lets assume you are right...

What I meant is that this isn't how people's internal processing works.

We have hyperbolic discounting of future utility regardless of risk/reward. It is just time preference (wiki it). A bowl of rice today is worth a lot more than a bowl of rice tomorrow. A bowl of rice a year from now is nearly equal in value to a bowl of rice a year and a day from now.

This might be why we are built the way we are built, but what we do is just really like stuff now more than we like stuff later. It is more likely that it is fairly natural to really want to consume. Food (for instance) is yummy. Saving food for tomorrow (or 1 or 10 years from now) isn't particularly yummy right now. There isn't much of an evolutionary reason to not consume.

This makes saving effortful. Consuming is more tempting than saving.

They aren't wrong because they are not trying to maximize total life consumption utility. (It is possible that they are incorrect in not trying to maximize total life consumption utility)

Utility of consumption today just feels better than the utility of consumption tomorrow does. Chez would put it as you just not caring about Rikers from 10 years from now nearly as much as you care about today's Rikers.

The list is endless (LTCM is my favorite as they keep me from doing stupid things that I'm tempted to do). The problem is that we are working against our nature when we expect people working for companies to be risk averse. We reward outperformance. Hedging risk properly doesn't make you a big payday.

I'd hire you to hedge risk for me.

But I'm not natural. I find present utility in saving to be greater than present utility in consuming.

sure, I'll admit this is correct but simply because the risk/reward is kinda hard to assess - there are rarely fixed outcomes in life, it's a distribution - so ppl replace that with a big question mark and put it into the noise section in their discounting equation

ppl simply discount based on the information they have and most of them have no information/knowledge so it boils down to a time preference discount as you point out....

that's bcs you have everything you need on the utility curve and extra consumption is simply below marginal for you so you wait until something exciting comes along (hmmm... new anti-aging method maybe?)

but most ppl don't have their utility covered* (nice job, car, chick, guy, vacation home, friends, monetary cushion, food, safe neighborhood etc.), and since** the game is relative status, they consume more then their purchasing power allows expanding the credit bubble to obtain those assets - or to be precise to get the emotional positive feedback in their brains from obtaining those assets

*note: note everyone has the same utility curve but for the sake of argument, lets assume a normal distribution around the average joe utility curve

**here I go again

a little detour: banking and buyout of domestic government bonds is simply a long term relationship where the bank gets a free cushion on gov default

a little detour_v2: this is mostly dominant in risk management - there is a incentive to over-leverage with OPM - ride the bonus wave when everything is good, blame the market when you fall crashing down and retire in 5-10 years

I'm pretty sure you knew this but just in case....

Did the research give any kind of idea what was monthly income, debt/savings of target group. Couple of years ago I had taken less money in a minute rather than waiting for longer due to overdraft charges + even there were no fees I would rather have money than debt especially since you often know you have to spend money on this and money on that. Christmas coming, car loan pay day. the little bit extra didn't feel much when you had no money. It all changes when you have a bit of savings and can all of sudden keep certain money separate from your daily concerns.

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thought it was months, not month.

Actually the question was for Zeno, but anyone can answer.

I don't think they even consider risk for the most part. I think that is in line with your last paragraph.

I get current subjective utility from imagining myself not having to work.

In keeping with the thread's theme, I was offered an anti-aging cream by a young attractive woman the other night at the bar of a fairly nice hotel. She wanted $100 for a bottle of it. When I declined, she told me that part of the $100 would go for her coming to my room to apply it.

Nah. I'm just greedy, which is better.

Not everyone has the same preferences. Other than for obligations I have to women and children, I'd prefer to live in the more scary interesting surroundings.

Some people have more or less hyperbolic curves, but that is a bit different of a concept.

There aren't a lot of shots you can take with other people's money. Best to take them when available. Unless, of course, you like to think of yourself as a decent person.

FBI profiler Jim Clemente words:

appropriate since threads about determinism pop out all so often in this sub-forum....

Pretty funny. The personality test that I used to do research with showed that cops and robbers have (on average) exactly the same sort of personality. A bit of manic and depressive and a lot of *******.

Anyone who enjoys spending time with both groups would say that this is fairly obvious.

What part of personality is not determined by genetics and life events?

He was implying the circumstances you find yourself in when he said "life events," I think.

Had he said "nature and nurture combine to make you and situation is what you react to" it wouldn't have been as catchy.

Ah yes, that makes more sense.

Still too catchy. Situation is nuture and nature isnt fixed either.

We need something more like how past nature and nuture combine to nake how you react in a current situation.

like given changing environmental conditions nurture is simply a strategy that is passed on to maximize survivability of an individual based on near past experience and genes are simply a recombination of genes plus mutation that survive in the past env - so there is no nurture it's simply environment and if we could know the environment we could know what all the actors would do...

....hm?

P.s. since this is all computably hard it's easier to analyze personality on the spot and current environment to give a solid prediction then to try and analyze all past environmental situations the subject has experienced

now chez, tell us... wat was your relationship with your mother?

Dr. B will have some interesting conclusions, I'm sure....

All FBI profilers should be called Jim Clemente.

genes aren't fixed which that may have assumed but yes more or less ignoring maximal survivability which is a bit of a mistake.

still is pretty good I think. not much there for Dr B unless its devil in detail.

explain...

maximum survability of individuals plays almost no part in anything.

Nurturing strategies will commonly be focused on reproduction, defending the local genepool etc