Tax the NRIs
Pearls of wisdom from Charlie Munger

Marginal utility and time preference

A while back my attention was caught by an excellent story while watching an episode of "The Discovery of India", the Indian TV serial based on the book of the same name by India's first Prime Minister, Jawaharlal Nehru.  A King has an irresponsible brother who is all the time engaged in sensory pleasures. Repeated attempts to change his behavior were a complete failure. Frustrated, the kindg decides to teach him a serious lesson. The King gets his brother trapped under false charges of sedition and awards him the death penalty. But the death penalty is scheduled after a month and the brother is given a freedom to enjoy whatever he wants and as much he can for that month. But  knowing that he faces a certain death, he cannot enjoy anything! Alcohol doesn't taste as good as it used to; even dancers, garden and food, all loose their lure! Suddently, he gets religion, literally speaking! He repents and apologizes repeatedly to the King, who forgives him finally just before the scheduled day of carrying out the death penalty!

Is this behavior plausible? It seems to me that some people will definitely behave like the brother of the king in the story! How can one explain this? Faced with the certain death, the king's brother lost both his time preference for enjoyment and also reduced his marginal utility of pleasures to zero ! Why? With time remaining so short, shouldn't one want to enjoy as much as one can? There is nothing to be gained by postponing pleasures, let alone abondoning them altogether! So, what's  was going on?

Comments

Ashish

Michael,
The king's brother did not know that he will get reprieve when he decided to stop enjoying sensory pleasures.

Michael H.

Hi Ashish
Considering that his switch from enjoying sensory pleasures to religion gained him a reprieve and a chance to live a full life, there is little reason to question his preferences. In any case, it would be hard not to be depressed about dying soon.

Navin

It could be because man is infinitely jealous.. faced with a certain death.. he broods because he wont be able to enjoy anymore..

Being a "nice man" seems to be no fun ?

That kings brother would have "returned to old ways" otherwise his earlier fear/dislike for death is meaninglesss ?

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