Revising Commitments: Field Evidence on the Adjustment of Prior Choices

Xavier Gine, Jessica Goldberg, Dan Silverman and Dean Yang

No 18065, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The very poor in developing countries often make intertemporal choices that seem at odds with their individual self-interest. There are many possible reasons why. We investigate several of these reasons with a lab-in-the-field experiment in rural Malawi involving large stakes. We make two contributions. First, we construct a new dependent variable: revisions of prior choices regarding the allocation of future income. This allows us to directly examine intertemporal choice revision and its determinants. In particular, this dependent variable permits a novel test for the existence of self-control problems: we find that revisions of money allocations toward the present are positively associated with measures of present-bias from an earlier baseline survey, as well as the (randomly assigned) closeness in time to the first possible date of money disbursement. Second, we investigate other potential determinants of revision, aside from self-control problems. We find little evidence that revisions of money allocations toward the present are associated with spousal preferences for such revision, household shocks or the financial sophistication of respondents.

JEL-codes: D81 D91 O10 (search for similar items in EconPapers)
Date: 2012-05
New Economics Papers: this item is included in nep-exp
Note: LS PE
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Citations: View citations in EconPapers (32)

Published as Xavier Giné & Jessica Goldberg & Dan Silverman & Dean Yang, 2017. "Revising Commitments: Field Evidence on the Adjustment of Prior Choices," The Economic Journal, .

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Journal Article: Revising Commitments: Field Evidence on the Adjustment of Prior Choices (2018)
Working Paper: Revising commitments: field evidence on the adjustment of prior choices (2012)
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