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Pre-commitment and flexibility in a time decision experiment

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  • Marco Casari

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Abstract

This study presents experimental data on pre-commitment and flexibility where monetary rewards are delivered with an actual delay. Preference for pre-commitment is defined as willingness to pay a cost to restrict the size of the choice set available in the future. Preference for flexibility is defined as willingness to pay a cost to enlarge the choice set available in the future. The existing empirical evidence about these phenomena is rather limited. On the other hand, models of intertemporal choice differ widely on these issues, with some predicting only demand for pre-commitment, others only demand for flexibility, while others neither one. We find that two-thirds of the subjects cannot be accounted for with the canonical exponential discounting model and that there is demand for both pre-commitment and flexibility.

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Bibliographic Info

Article provided by Springer in its journal Journal of Risk and Uncertainty.

Volume (Year): 38 (2009)
Issue (Month): 2 (April)
Pages: 117-141

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Handle: RePEc:kap:jrisku:v:38:y:2009:i:2:p:117-141

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Web page: http://www.springerlink.com/link.asp?id=100299

Related research

Keywords: Experiments; Intertemporal choices; Dynamic consistency; Commitment; Flexibility; Uncertainty; C91; D90; D81;

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References

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  1. Casari, Marco, 2006. "Pre-Commitment and Flexibility in a Time Decision Experiment," Purdue University Economics Working Papers 1183, Purdue University, Department of Economics.
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Citations

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Cited by:
  1. M. Casari & D. Dragone, 2011. "Impatience, Anticipatory Feelings and Uncertainty: A Dynamic Experiment on Time Preferences," Working Papers wp777, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Marco Casari, 2009. "Pre-commitment and flexibility in a time decision experiment," Journal of Risk and Uncertainty, Springer, vol. 38(2), pages 117-141, April.
  3. Wei-Yin Hu & Olivia S. Mitchell & Cynthia Pagliaro & Stephen P. Utkus, 2013. "Evaluating Web-based Savings Interventions: A Preliminary Assessment," Working Papers wp299, University of Michigan, Michigan Retirement Research Center.
  4. Benhabib, Jess & Bisin, Alberto & Schotter, Andrew, 2010. "Present-bias, quasi-hyperbolic discounting, and fixed costs," Games and Economic Behavior, Elsevier, vol. 69(2), pages 205-223, July.
  5. Barton L. Lipman & Wolfgang Pesendorfer, 2010. "Temptation," Boston University - Department of Economics - Working Papers Series WP2010-021, Boston University - Department of Economics.
  6. Filippin, A. & Crosetto, P., 2014. "A reconsideration of gender differences in risk attitudes," Working Papers 2014-01, Grenoble Applied Economics Laboratory (GAEL).
  7. Matthias Uhl, 2011. "Do Self-Committers Mind Other-Imposed Commitment? An Experiment on Weak Paternalism," Rationality, Markets and Morals, Frankfurt School Verlag, Frankfurt School of Finance & Management, vol. 2(40), June.
  8. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  9. Schlüter, Tobias & Sievers, Sönke & Hartmann-Wendels, Thomas, 2012. "How can banks effectively stabilize their retail customers saving behavior? The impact of contractual rewards on saving persistence and cash flow volatility," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62057, Verein für Socialpolitik / German Economic Association.
  10. Alberto Bisin & Kyle Hyndman, 2014. "Present-Bias, Procrastination and Deadlines in a Field Experiment," NBER Working Papers 19874, National Bureau of Economic Research, Inc.
  11. Kirsten Rohde, 2010. "The hyperbolic factor: A measure of time inconsistency," Journal of Risk and Uncertainty, Springer, vol. 41(2), pages 125-140, October.

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