Free Capitalist Network - Community Archive
Mises Community Archive
An online community for fans of Austrian economics and libertarianism, featuring forums, user blogs, and more.

A Though One About Time Preference

rated by 0 users
Not Answered This post has 0 verified answers | 1 Reply | 1 Follower

Not Ranked
28 Posts
Points 450
Rafael Hotz posted on Tue, Jul 28 2009 3:10 PM

Suppose an island where the only food is fresh fish. Crusoe has, say, 10 fish, and he knows that in a few months he won't be able do catch them by himself (he's too old). He then decides do exchange with Friday, and the deal he gets turns out to be 10 present fish for 9 future fish.

 

I thought in two answers for the negative spread: fish when able to work and fish when unable to work are different goods (like the commom "ice objection" to Time Preference), or that there must be something like a purchasing power premium for the rottening of the fish (it's value is not transported through time)...

 

Any thoughts?

  • | Post Points: 20

All Replies

Top 10 Contributor
Male
5,255 Posts
Points 80,815
ForumsAdministrator
Moderator
SystemAdministrator

TP applies to homogeneous goods. Your first answer is IMO correct, you're dealing with heterogeneous goods.

Freedom of markets is positively correlated with the degree of evolution in any society...

  • | Post Points: 5
Page 1 of 1 (2 items) | RSS