Paid and hypothetical time preferences are the same: Lab, field and online evidence
Pablo Brañas-Garza,
Diego Jorrat,
Antonio Espín and
Angel Sánchez
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Angel Sánchez: Universidad Carlos III de Madrid
No 54, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)
Abstract:
The use of hypothetical instead of real decision-making incentives remains under debate after decades of economic experiments. Standard incentivized experiments involve substantial monetary costs due to participants' earnings and often logistic costs as well. In time preferences experiments, which involve future payments, real payments are particularly problematic. Since immediate rewards frequently have lower transaction costs than delayed rewards in experimental tasks, among other issues, (quasi)hyperbolic functional forms cannot be accurately estimated. What if hypothetical payments provide accurate data which, moreover, avoid transaction cost problems? In this paper, we test whether the use of hypothetical - versus real - payments affects the elicitation of short-term and long-term discounting in a standard multiple price list task. One-out-of-ten participants probabilistic payment schemes are also considered. We analyze data from three studies: a lab experiment in Spain, a well-powered field experiment in Nigeria, and an online extension focused on probabilistic payments. Our results indicate that paid and hypothetical time preferences are mostly the same and, therefore, that hypothetical rewards are a good alternative to real rewards. However, our data suggest that probabilistic payments are not.
Keywords: Time; preferences; hypothetical; vs; real; payoffs; lab; field; online; experiments; BRIS (search for similar items in EconPapers)
JEL-codes: C91 C93 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2021-04
New Economics Papers: this item is included in nep-exp and nep-upt
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Citations: View citations in EconPapers (2)
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https://drive.google.com/file/d/1jL2YmUd7w3IyKp1amf31uXOtQ89-dzm9/view (application/pdf)
Related works:
Journal Article: Paid and hypothetical time preferences are the same: lab, field and online evidence (2023)
Working Paper: Paid and hypothetical time preferences are the same: Lab, field and online evidence (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:54
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