Published online by Cambridge University Press: 22 December 2005
Canonical utility theory may have adopted its selfishness postulate because it lacked theoretical rationales for two major kinds of incentive: empathic utility and self-signaling. Empathy – using vicarious experiences to occasion your emotions – gives these experiences market value as a means of avoiding the staleness of self-generated emotion. Self-signaling is inevitable in anyone trying to overcome a perceived character flaw. Hyperbolic discounting of future reward supplies incentive mechanisms for both empathic utility and self-signaling. Neither can be effectively suppressed for an experimental game.
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1. Determined canonical theorists might see such choices as a test of whether they had overcome “irrational” empathic urges – hence the reported epidemic of selfishness among economists (Frank et al. 1993).