Time Consistency: Stationarity and Time Invariance

Yoram Halevy

Microeconomics.ca working papers from Vancouver School of Economics

Abstract: A sequence of experiments documents static and dynamic ``preference reversals'' between sooner-smaller and later-larger rewards, when the sooner reward could be immediate. The theoretically-motivated design permits separate identification of time-consistent, stationary and time-invariant choices. At least half of the subjects are time consistent, but only three-quarters of them exhibit stationary choices. About half of subjects with time inconsistent choices have stationary preferences. These results challenge the view that present-bias preferences are the main source of time inconsistent choices.

Keywords: Time Discounting; diminishing imparience; dynamic consistency; present bias; stability; intertemporal preferences (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 D91 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2012-06-24, Revised 2015-02-25
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (142)

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Related works:
Journal Article: Time Consistency: Stationarity and Time Invariance (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:ubc:pmicro:yoram_halevy-2012-39

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