An Experimental Analysis of Intertemporal Allocation Behavior

Vital Anderhub, Werner Güth, Wieland Müller and Martin Strobel
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Vital Anderhub: Humboldt University at Berlin
Werner Güth: Humboldt University at Berlin

Experimental Economics, 2000, vol. 3, issue 2, No 3, 137-152

Abstract: Abstract If the future is uncertain, optimal intertemporal decisions rely on anticipating one's own optimal future behavior as is typical in dynamic programming. Our aim is to detect experimentally stylized facts about intertemporal decision making in a rich stochastic environment. Compared to previous experimental studies our experimental design is more complex since the time horizon is uncertain and termination probabilities have to be updated. In particular the decision task is non-stationary as in real life which seriously complicates the task of diagnosing behavioral regularities. In this study we give some illustrative results and provide some general perspectives. Our main result is that subjects'reaction to information about termination probablilities are qualitatively correct.

Keywords: intertemporal; allocation; behavior (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (3)

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DOI: 10.1023/A:1026589319018

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