The Two Investment Opportunity Principles, The Two Impatience Principles (2)

There exists, for each individual, a given specific set or list of optional income streams to choose from, differing in size and time shape (but without any uncertainty as to what will happen if any particular one is chosen).

Out of this list of options each individual will choose that particular income stream possessing the greatest present worth when calculated by means of the rate of interest as finally determined by these six conditions.

The degree of impatience, or rate of time preference, of any given individual depends upon his income stream as chosen by him and as modified by exchange.

Each person, after or while first choosing the option of greatest present worth, will then modify it by exchange so as to convert it into that particular form most wanted by him.

This implies, as we have seen, that each person's degree of impatience, or rate of time preference, will at the margin, be brought to equality with the market rate of interest and, therefore, with the marginal preference rates of all the other persons.