Freud supposedly said that Nietzsche knew himself better than anyone who ever lived or is likely to live in the future. If the story is true, it's one of the best compliments of all time. Yet Nietzsche's psychological theories remain largely unknown to psychologists, philosophers and certainly to economists. These theories, taken together, constitute a profound attack on the foundations of neoclassical models in which individuals maximize the discounted flow of gratification they expect to receive. Scattered through Nietzsche's writings, we can find an alternative description of intertemporal choice motivated by overcoming obstacles. A principal objective of this paper is to show how Nietzsche's theory of overcoming can explain a great deal of observable behavior and solve important problems in economics.
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