Present Bias and Collective Dynamic Choice in the Lab

Matthew Jackson and Leeat Yariv

American Economic Review, 2014, vol. 104, issue 12, 4184-4204

Abstract: 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)

JEL-codes: C91 D12 D71 D72 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.12.4184
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Citations: View citations in EconPapers (80)

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