Loss Aversion and Intertemporal Choice: A Laboratory Investigation

Robert Oxoby and William Morrison ()

No 4854, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We present results from a laboratory study of loss aversion in the context of intertemporal choice. We investigate whether the provision of (windfall) endowments results in different elicited discount rates relative to subjects who earn income or earn and retain the income for a period before making intertemporal decisions. We hypothesize that loss aversion in an intertemporal choice yields higher discount rates among subjects earning and retaining. Our results support this hypothesis: among subjects who earn and retain their income we elicit substantially higher discount rates relative to those experiencing a windfall gain.

Keywords: discount rates; intertemporal choice; experiments (search for similar items in EconPapers)
JEL-codes: C91 D91 (search for similar items in EconPapers)
Pages: 14 pages
Date: 2010-03
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published as 'The endowment effect and intertemporal choice: a laboratory investigation' in: Canadian Journal of Economics, 2013, 46 (2), 689 - 704

Downloads: (external link)
https://docs.iza.org/dp4854.pdf (application/pdf)

Related works:
Working Paper: Loss Aversion and Intertemporal Choice: A Laboratory Investigation (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp4854

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().