Investigation of the Convex Time Budget Experiment by Parameter Recovery Simulation

Keigo Inukai, Yuta Shimodaira () and Kohei Shiozawa

ISER Discussion Paper from Institute of Social and Economic Research, Osaka University

Abstract: The convex time budget (CTB) method is a widely used experimental technique for eliciting an individual’s time preference in intertemporal choice problems. This paper investigates the accuracy of the estimation of the discount factor parameter and the present bias parameter in the quasi-hyperbolic discounting utility function for the CTB experiment. In this paper, we use a simulation technique called “parameter recovery.” We found that the precision of present bias parameter estimation is poor within the scope of previously reported parameter estimates, making it difficult to detect the effect of present bias. Our results recommend against using a combination of the CTB experimental task and the quasi-hyperbolic discounting utility model to explore the effect of present bias. This paper contributes to addressing the replicability issue in experimental economics and highlights the importance of auditing the accuracy of parameter estimates before conducting an experiment.

Date: 2022-08, Revised 2023-03
New Economics Papers: this item is included in nep-dcm, nep-ecm, nep-exp and nep-upt
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Related works:
Journal Article: Investigation of the convex time budget experiment by parameter recovery simulation (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1185r

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