Anchoring effects in experimental discount rate elicitation

Daniel Hermann and Oliver Musshoff

Applied Economics Letters, 2016, vol. 23, issue 14, 1022-1025

Abstract: Discount rates are often elicited using incentivized or hypothetical multiple price lists. We conduct two multiple price lists according to Coller and Williams ( Experimental Economics 2: 107--127, 1999) with varying ranges of larger--later payments. Participants carry out both tasks and are randomly assigned to a task order as well as to a payment or no-payment treatment. Our results indicate that the range of the first completed task anchors discount rate decisions. Participants who begin the task with the lower range of the larger--later payments stated lower discount rates than participants who start with the task containing a wider range. Paying monetary incentives does not influence the detected anchor effect.

Date: 2016
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DOI: 10.1080/13504851.2015.1128072

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