Resource Game: Present Bias and Sophisticated Paradigm

Abstract Differences in patience across language groups have recently received increased attention in the literature. We provide evidence on this issue by measuring time preferences of French and German speakers from a bilingual municipality in Switzerland where institutions are shared and socioeconomic conditions are very similar across the two language groups. We find that French speakers are significantly more impatient than German speakers, and differences are particularly pronounced when payments in the present are involved. Estimates of preference parameters of a quasi-hyperbolic discounting model suggest significant differences in both present bias (β) and the long-run discount factor (δ) across language groups.

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Can Optimism be a Remedy for Present Bias?

Journal of money credit and banking ◽

10.1111/jmcb.12726 ◽

2020 ◽

Vol 53 (1) ◽

pp. 201-231

Author(s):

MINWOOK KANG ◽

LEI SANDY YE

Keyword(s):

Present Bias

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Present Bias: Lessons Learned and To Be Learned

The American Economic Review ◽

10.1257/aer.p20151085 ◽

2015 ◽

Vol 105 (5) ◽

pp. 273-279 ◽

Cited By ~ 53

Author(s):

Ted O'Donoghue ◽

Matthew Rabin

Keyword(s):

Lessons Learned ◽

Theoretical Understanding ◽

Present Bias ◽

The Past ◽

Empirical Analyses

While present bias is an old idea, it only took hold in economics following David Laibson's (1994) dissertation. Over the past 20 years, research has led to a much better theoretical understanding of present bias, when and how to apply it, and which ancillary assumptions are appropriate in different contexts. Empirical analyses have demonstrated how present bias can improve our understanding of behavior in various economic field contexts. Nonetheless, there is still much to learn. In this paper, we give our assessment of some lessons learned, and to be learned.

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Thinking About Tomorrow? Predicting Experimental Choice Behavior and Life Outcomes from a Survey Measure of Present Bias

SSRN Electronic Journal ◽

10.2139/ssrn.3099406 ◽

2017 ◽

Author(s):

Pia R. mname Pinger

Keyword(s):

Choice Behavior ◽

Life Outcomes ◽

Present Bias ◽

Survey Measure

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Time versus State in Insurance: Experimental Evidence from Contract Farming in Kenya

The American Economic Review ◽

10.1257/aer.20171526 ◽

2018 ◽

Vol 108 (12) ◽

pp. 3778-3813 ◽

Cited By ~ 33

Author(s):

Lorenzo Casaburi ◽

Jack Willis

Keyword(s):

Crop Insurance ◽

Counterparty Risk ◽

Harvest Time ◽

Contract Farming ◽

Present Bias ◽

The Poor ◽

Percentage Points ◽

Randomized Control ◽

The Difference

The gains from insurance arise from the transfer of income across states. Yet, by requiring that the premium be paid up front, standard insurance products also transfer income across time. We show that this intertemporal transfer can help explain low insurance demand, especially among the poor, and in a randomized control trial in Kenya we test a crop insurance product which removes it. The product is interlinked with a contract farming scheme: as with other inputs, the buyer of the crop offers the insurance and deducts the premium from farmer revenues at harvest time. The take-up rate for pay-at-harvest insurance is 72 percent, compared to 5 percent for the standard pay-up-front contract, and the difference is largest among poorer farmers. Additional experiments and outcomes provide evidence on the role of liquidity constraints, present bias, and counterparty risk, and find that enabling farmers to commit to pay the premium just 1 month later increases demand by 21 percentage points. (JEL G22, I32, O13, O16, Q12, Q14)

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Sunk Decision Points: A Unified Theory of the Endowment Effect and Present Bias

SSRN Electronic Journal ◽

10.2139/ssrn.2732626 ◽

2016 ◽

Cited By ~ 1

Author(s):

Peter Landry

Keyword(s):

Endowment Effect ◽

Unified Theory ◽

Present Bias ◽

Decision Points

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Meta-Analysis of Present-Bias Estimation Using Convex Time Budgets

10.31222/osf.io/mjvt5 ◽

2019 ◽

Cited By ~ 2

Author(s):

Taisuke Imai ◽

Tom Rutter ◽

Colin Camerer

Keyword(s):

Time Budget ◽

Meta Analysis ◽

Primary Source ◽

Monetary Reward ◽

Selective Reporting ◽

Bias Parameter ◽

Bias Estimation ◽

Current Time ◽

Present Bias ◽

Time Period

We examine 220 estimates of the present-bias parameter from 28 articles using the Convex Time Budget protocol. The literature shows that people are on average present biased, but the estimates exhibit substantial heterogeneity across studies. There is evidence of modest selective reporting in the direction of overreporting present-bias. The primary source of the heterogeneity is the type of reward, either monetary or non-monetary reward, but the effect is weakened after correcting for potential selective reporting. In the studies using the monetary reward, the delay until the issue of the reward associated with the "current" time period is shown to influence the estimates of present bias parameter.

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