A guaranteed immediate payout reduces impatience of financially constrained individuals

Kimberley van der Heijden, Anouk Festjens, Caroline Goukens and Tom Meyvis
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Kimberley van der Heijden: a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;
Anouk Festjens: a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;
Caroline Goukens: a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;
Tom Meyvis: b Leonard N. Stern School of Business, New York University, New York, NY 10012

Proceedings of the National Academy of Sciences, 2022, vol. 119, issue 3, e2108832119

Abstract: A wealth of existing findings show that financially constrained individuals are myopic decision-makers who are particularly concerned about the present. We propose that the use of existing intertemporal choice tasks may have skewed our understanding of the decision-making of financially constrained individuals. Specifically, we observe that—as long as an immediate payout is guaranteed—financially constrained individuals are no more myopic than their more affluent counterparts.

Keywords: scarcity; financial constraint; intertemporal choice; choice patience (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:nas:journl:v:119:y:2022:p:e2108832119

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