Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting, with an Application to Mammography Decisions

Hanming Fang and Yang Wang ()
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Yang Wang: Department of Economics, Lafayette College

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: We extend the semi-parametric estimation method for dynamic discrete choice models using Hotz and Miller’s (1993) conditional choice probability (CCP) approach to the setting where individuals may have hyperbolic discounting time preferences and may be naive about their time inconsistency. We illustrate the proposed estimation method with an empirical application of adult women’s decisions to undertake mammography to evaluate the importance of present bias and naivety in the under-utilization of this preventive health care. Our results show evidence for both present bias and naivety.

Keywords: Time Inconsistent Preferences; Intrapersonal Games; Dynamic Discrete Choices; Preventive Care (search for similar items in EconPapers)
JEL-codes: C14 I1 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2010-10-04
New Economics Papers: this item is included in nep-dcm, nep-ecm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Working Paper: Estimating Dynamic Discrete Choice Models with Hyperbolic Discounting, with an Application to Mammography Decisions (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:pen:papers:10-033

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