Wednesday, October 17, 2007

Negative Discount Rates

Is anyone else out there in possession of a negative discount rate? I'm fairly sure I am, at least for some goods. Now, I'm not willing to give $100 today for $95 next year, but I find there are several areas where I would pay to delay my consumption of something that is unambiguously a good.

For example, I derive substantial utility from plotting how to purchase video games. I conduct research, visit stores, etc, even when the end result of the purchase is often leaving it on the shelf. Similarly, I think I derive more utility from plotting what to do with my free time than I actually get from utilizing that free time.

Basically, my anticipation, or more correctly, planning, of consumption often outweighs the utility derived from consumption, even in the context of perfect information about what is to be consumed.

I'm unsure how compatible this is in terms of welfare economics, but that's not my field.

No comments: