EconPapers    
Economics at your fingertips  
 

Arbitrage Or Narrow Bracketing? On Using Money to Measure Intertemporal Preferences

James Andreoni (), Christina Gravert, Michael Kuhn (), Silvia Saccardo and Yang Yang

No 25232, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: If experimental subjects arbitrage against market interest rates when making intertemporal allocations of cash, the data will reveal nothing about subjects' discount rates, only uncovering subjects' market interest rates. If they frame choices narrowly, market rates will not be salient and the experiment will uncover subjects' utility discount rates. We test arbitrage directly by forcing all transactions with subjects to be instant electronic bank transfers, thus making arbitrage easy and salient. We also employ four decision frames to test alternative hypotheses. Our evidence contradicts arbitrage, supports money as a valid reward, and suggests framing as a correlate with present bias.

JEL-codes: C18 C91 D15 D87 D9 G41 (search for similar items in EconPapers)
Date: 2018-11
New Economics Papers: this item is included in nep-exp and nep-upt
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://www.nber.org/papers/w25232.pdf (application/pdf)

Related works:
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:nbr:nberwo:25232

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25232

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2020-09-06
Handle: RePEc:nbr:nberwo:25232