EconPapers    
Economics at your fingertips  
 

Intertemporal choice with liquidity constraints: Theory and experiment

Dale Stahl

Economics Letters, 2013, vol. 118, issue 1, 101-103

Abstract: Since Thaler (1981), we have lived with the uncomfortable stylized fact that many humans choose strictly dominated actions in intertemporal choice experiments. We designed an experiment to probe the reasons for the apparently suboptimal behavior, and we find that the classic Fisher (1930) intertemporal choice theory with perceived transaction costs and liquidity constraints is perfectly consistent with our experimental data, whereas hyperbolic discounting is not.

Keywords: Intertemporal choice; Liquidity; Present bias; Hyperbolic discounting (search for similar items in EconPapers)
JEL-codes: C9 D1 D9 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176512005344
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:118:y:2013:i:1:p:101-103

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-04-01
Handle: RePEc:eee:ecolet:v:118:y:2013:i:1:p:101-103