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Procedures for eliciting time preferences

David Freeman (), Paola Manzini (), Marco Mariotti and Luigi Mittone

Journal of Economic Behavior & Organization, 2016, vol. 126, issue PA, 235-242

Abstract: We study three procedures to elicit attitudes toward delayed payments: the Becker–DeGroot–Marschak procedure; the second price auction; and the multiple price list. The payment mechanisms associated with these methods are widely considered as incentive compatible, thus if preferences satisfy Procedure Invariance, which is also widely (and often implicitly) assumed, they should yield identical time preference distributions. We find instead that the monetary discount rates elicited using the Becker–DeGroot–Marschak procedure are significantly lower than those elicited with a multiple price list. We show that the behavior we observe is consistent with an existing psychological explanation of preference reversals.

Keywords: Time preferences; Elicitation methods; Becker–DeGroot–Marschak procedure; Auctions; Multiple price list (search for similar items in EconPapers)
JEL-codes: C91 D9 (search for similar items in EconPapers)
Date: 2016
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Working Paper: Procedures for Eliciting Time Preferences (2016) Downloads
Working Paper: Procedures for Eliciting Time Preferences (2015) Downloads
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