Procedures for Eliciting Time Preferences
David Freeman (),
Paola Manzini (),
Marco Mariotti and
No 201513, Discussion Paper Series, School of Economics and Finance from School of Economics and Finance, University of St Andrews
We study three procedures to elicit attitudes towards delayed payments: the Becker-DeGroot-Marschak procedure; the second price auction; and the multiple price list. The payment mechanisms associated with these methods are widely considered as incentive compatible, thus if preferences satisfy Procedure Invariance, which is also widely (and often implicitly) assumed, they should yield identical time preference distributions. We find instead that the monetary discount rates elicited using the Becker-DeGroot-Marschak procedure are significantly lower than those elicited with a multiple price list. We show that the behavior we observe is consistent with an existing psychological explanation of preference reversals.
Keywords: time preferences; elicitation methods; Becker-DeGroot-Marschak pro- cedure; auctions; multiple price list (search for similar items in EconPapers)
JEL-codes: C91 D9 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Journal Article: Procedures for eliciting time preferences (2016)
Working Paper: Procedures for Eliciting Time Preferences (2016)
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