Time Preference: Experiments and Foundations

Jawwad Noor

No WP2011-039, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: In order to elicit discount functions, experiments commonly analyze how subjects trade-off money and time. However, discounting reveals itself most transparently in behavior obtained by fixing the money dimension and varying only the time dimension. This paper presents an experimental procedure that, in a sense made precise, better identifies the discount func- tion. The procedure is based on a general theorem that characterizes the set of discount functions and utility indices compatible with any regular preference (monotone weak order) over dated rewards. The money-time separability and curvature assumptions that are common in the literature are not required.

Pages: 41 pages
Date: 2011-01
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:bos:wpaper:wp2011-039

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