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Procedures for eliciting time preferences

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  • Freeman, David
  • Manzini, Paola
  • Mariotti, Marco
  • Mittone, Luigi

Abstract

We study three procedures to elicit attitudes toward 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.

Suggested Citation

  • Freeman, David & Manzini, Paola & Mariotti, Marco & Mittone, Luigi, 2016. "Procedures for eliciting time preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 126(PA), pages 235-242.
    • Handle: RePEc:eee:jeborg:v:126:y:2016:i:pa:p:235-242
    DOI: 10.1016/j.jebo.2016.03.017
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    5. Maximilian Spath, 2023. "The qualitative accuracy of the Becker-DeGroot-Marshak method," Papers 2302.04055, arXiv.org.
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    10. Bull, Charles & Courty, Pascal & Doyon, Maurice & Rondeau, Daniel, 2019. "Failure of the Becker–DeGroot–Marschak mechanism in inexperienced subjects: New tests of the game form misconception hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 235-253.
    11. Jia-Tao Ma & Lei Wang & Li-Na Chen & Quan He & Qing-Zhou Sun & Hong-Yue Sun & Cheng-Ming Jiang, 2021. "Comparing mixed intertemporal tradeoffs with pure gains or pure losses," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 16(3), pages 709-728, May.
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    13. Samek, Anya & Gray, Andre & Datar, Ashlesha & Nicosia, Nancy, 2021. "Adolescent time and risk preferences: Measurement, determinants and field consequences," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 460-488.

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    More about this item

    Keywords

    Time preferences; Elicitation methods; Becker–DeGroot–Marschak procedure; Auctions; Multiple price list;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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