Present-Biased Generosity: Time Inconsistency across Individual and Social Contexts
Felix Koelle and
Lukas Wenner ()
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Felix Koelle: University of Cologne
Lukas Wenner: University of Cologne
Authors registered in the RePEc Author Service: Felix Kölle
No 2018-02, Discussion Papers from The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham
In a variety of individual decision contexts, people have been shown to exhibit presentbiased time preferences. Little is known, however, about discounting when there are trade-offs between own and others' consumption. In this paper, we provide a systematic analysis of present bias in individual and social contexts, as well as its stability across these two. In a longitudinal experiment, subjects make a series of intertemporal allocation decisions of real-effort tasks for varying prices using a convex budget set approach. We find a substantial present bias in generosity. In generalized dictator games, subjects behave more altruistically towards others when deciding in advance rather than in the present, while delaying consequences plays no role when choices only affect the future. At the individual level, we find that the present bias displayed in social contexts is correlated with present bias in intertemporal choices that only affect own consumption. This demonstrates that the desire for immediate gratification is a behavioral phenomenon that is stable across contexts.
Keywords: Present bias; altruism; stability; real effort; dictator game; intertemporal choice (search for similar items in EconPapers)
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