Interpreting Time Horizon Effects in Inter-Temporal Choice

Thomas Dohmen, Armin Falk, David B. Huffman () and Uwe Sunde ()
Additional contact information
David B. Huffman: University of Pittsburgh
Uwe Sunde: University of Munich

No 6385, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We compare different designs that have been used to test for an impact of time horizon on discounting, using real incentives and two representative data sets. With the most commonly used type of design we replicate the typical finding of declining (hyperbolic) discounting, but with other designs find constant or increasing discounting. As a whole, the data are not consistent with any of these usual candidate discounting assumptions, and they also imply a violation of transitivity. The results have implications for interpreting previous evidence, and pose an important puzzle for understanding inter-temporal choice.

Keywords: time preference; hyperbolic discounting; self-control; dynamic inconsistency; intransitivity (search for similar items in EconPapers)
JEL-codes: D01 D03 D90 E21 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2012-02
New Economics Papers: this item is included in nep-cbe and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Related works:
Working Paper: Interpreting Time Horizon Effects in Inter-Temporal Choice (2012)
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