scholarly journals Present Bias and Collective Dynamic Choice in the Lab

2014 ◽  
Vol 104 (12) ◽  
pp. 4184-4204 ◽  
Author(s):  
Matthew O. Jackson ◽  
Leeat Yariv
Keyword(s):  
Time Preferences ◽  
Dynamic Choice ◽  
Time Discounting ◽  
Collective Dynamic ◽  
Present Bias ◽  
Lab Experiments ◽  
Collective Decisions ◽  
As If

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, utilitarian aggregation necessitates a present bias. In lab experiments three quarters of “social planners” exhibited present biases, and less than two percent were time consistent. Roughly a third of subjects acted as if they were pure utilitarians, and the rest chose as if they also had varying degrees of distributional concerns. (JEL C91, D12, D71, D72)

scholarly journals Collective Dynamic Choice: The Necessity of Time Inconsistency

2015 ◽  
Vol 7 (4) ◽  
pp. 150-178 ◽  
Author(s):  
Matthew O. Jackson ◽  
Leeat Yariv
Keyword(s):  
Utility Functions ◽  
Time Inconsistency ◽  
Time Preferences ◽  
Dynamic Choice ◽  
Time Discounting ◽  
Collective Dynamic ◽  
Collective Decisions ◽  
Voting Methods ◽  
Pareto Efficient ◽  
Time Inconsistent

We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with any heterogeneity in time preferences, every Pareto efficient and non-dictatorial method of aggregating utility functions must be time-inconsistent. We also show that decisions made via non-dictatorial voting methods are intransitive.(JEL D71, D72, D91)

Time Preferences across Language Groups: Evidence on Intertemporal Choices from the Swiss Language Border*

2021 ◽  
Author(s):  
Holger Herz ◽  
Martin Huber ◽  
Tjaša Maillard-Bjedov ◽  
Svitlana Tyahlo
Keyword(s):  
Hyperbolic Discounting ◽  
Time Preferences ◽  
Discount Factor ◽  
Socioeconomic Conditions ◽  
Measuring Time ◽  
Present Bias ◽  
Language Groups ◽  
Long Run ◽  
Intertemporal Choices

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.

scholarly journals Economic situation and time discounting: Does construal level matter?

2020 ◽  
Author(s):  
Matus Adamkovic ◽  
Pavol Kačmár ◽  
Marcel Martončik ◽  
Peter Babincak
Keyword(s):  
Economic Situation ◽  
Time Preferences ◽  
Construal Level ◽  
Time Discounting ◽  
The Relationship

A promising factor for explaining the relationship between economic situation and time preferences is one's construal level (i.e., the abstractness/concreteness of thinking). In this preregistered experiment, we examined the effects of construal level manipulation on time discounting and additionally examined the relationships between the economic situation and time discounting in tasks involving both real incentives and hypothetical rewards. Although we found small effects of construal level manipulation on one's time preferences, we remain skeptical about the findings and offer alternative explanations. Further replication attempts on this topic are very much needed.

An analytical approach for behavioral portfolio model with time discounting preference

2018 ◽  
Vol 52 (3) ◽  
pp. 691-712
Author(s):  
Guang Yang ◽  
Xinwang Liu ◽  
Jindong Qin ◽  
Ahmed Khan
Keyword(s):  
Portfolio Selection ◽  
Investment Strategy ◽  
Cumulative Prospect Theory ◽  
Investment Strategies ◽  
Short Term ◽  
Time Discounting ◽  
Present Bias ◽  
Proposed Model ◽  
Portfolio Selection Model

This paper presents a behavioral portfolio selection model with time discounting preference. Firstly, we discuss the portfolio selection problem and then modify this model based on cumulative prospect theory (CPT) as well as considering investors’ time discounting preference in psychology. Furthermore, an analytical solution with satisfying behavior is given for our proposed model, the results show that when investors’ goals are very ambitious, they put a high proportion of their wealth in long-term goals and adopt aggressive investment strategies with high leverage to reach short-term goals and the overall investment strategy also displays high leverage. Finally, numerical analysis is given and it is shown that investor who tends to future bias performs adequate confidence and patience whereas investor with present bias is apt to the immediate interests.

Hyperbolic Time Discounting, Offender Time Preferences and Deterrence

2012 ◽  
Vol 28 (4) ◽  
pp. 607-628 ◽  
Author(s):  
Thomas A. Loughran ◽  
Ray Paternoster ◽  
Douglas Weiss
Keyword(s):  
Time Preferences ◽  
Time Discounting

scholarly journals Identifying present bias and time preferences with an application to land-lease-contract data1

2020 ◽  
Vol 23 (3) ◽  
pp. 363-385
Author(s):  
Pieter A Gautier ◽  
Aico van Vuuren
Keyword(s):  
Credit Constraints ◽  
Time Preferences ◽  
Competitive Market ◽  
Consumption Expenditure ◽  
Bias Parameter ◽  
Present Bias ◽  
Lease Contract

Summary What can contracts—traded and priced in a competitive market and featuring a pre-specified system of future payments—teach us about time preferences and present bias? We first show that identification of present bias requires assumptions on the felicity function and that agents must have credit constraints on consumption expenditure. Moreover, when there is heterogeneity in present bias, identification requires that agents with the same present bias parameter buy houses with different contracts. We illustrate our findings with observational land-lease-contract data from Amsterdam.

Do Religious Reminders Help You With Your Financial Decisions?

2020 ◽  
Vol 9 (3) ◽  
pp. 42-53
Author(s):  
Orhan Erdem ◽  
Amy Martin
Keyword(s):  
Decision Making ◽  
Undergraduate Students ◽  
Time Preferences ◽  
Prosocial Behaviors ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Present Bias ◽  
Laboratory Conditions ◽  
Financial Decision ◽  
The Relationship

Although religion is shown to be associated with several prosocial behaviors, not much work has been done on the relationship with economic or financial decision-making. This study aims to fill this gap. Surveying 87 undergraduate students under controlled laboratory conditions, the authors analyzed the effect of subtle reminders of religious concepts on time preferences in relation to finances. The results of the experiments showed that reminding participants of religious themes decreased the percentage of present bias by 10.4%.

scholarly journals Risk Preferences Are Not Time Preferences: Reply

2015 ◽  
Vol 105 (7) ◽  
pp. 2287-2293 ◽  
Author(s):  
James Andreoni ◽  
Charles Sprenger
Keyword(s):  
Intertemporal Choice ◽  
Risk Preferences ◽  
Time Preferences ◽  
Present Bias ◽  
Over Time

Can the well-known experimental phenomenon of present-bias in intertemporal choice be confounded with the risks associated with receiving payment? Can measurements of risk preferences be used to represent desires for smoothness in intertemporal payments? In our two 2012 papers in this journal we explored these two questions and found the answer to the first to be yes and the second to be no. We feel the three papers inspired by our work and published here underscore these arguments and point to interesting new possibilities for modeling and measuring risk over time. (JEL C91, D81, D91)

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