Abstract

How should one discount utility across time? The conventional wisdom in social science is that one should use an exponential discount function. Such a function is a representation of the axioms that provide a well-defined utility function plus a condition known as stationarity. Yet stationarity doesnt really have much intuitive normative pull on its own. Here I try to cast it in a normative glow by deriving stationarity from two explicitly normative premises, both suggested by the philosophical thesis of temporal neutralism. Putting the argument in this form helps us better understand exponential discounting and challenges to it.