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Comparing attitudes toward time and toward money in experience-based decisions

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  • Emmanuel Kemel
  • Muriel Travers

Abstract

This paper reports an experimental comparison of attitudes toward time and toward money in experience-based decisions. Preferences were elicited under rank-dependent utility for prospects with two or three consequences expressed either in time or in monetary units. Probabilities were unknown but learned through sampling. More specifically, time and money were compared under two conditions. In a first experiment, both consequences and probabilities of prospects were unknown and learned through sequential sampling. In a second experiment, the possible consequences were revealed after the sampling. A real incentive system was implemented for both time and money. The heterogeneity of preferences was assessed for time and for money through individual and mixed modeling estimations. We observe that the nature of consequences (time or money) modifies probability weighting in terms of elevation and sensitivity. Subjects exhibit more optimism and less sensitivity to probability changes when deciding about time than about money. Revealing the consequences impacts the shape of the utility function and leaves probability weighting unchanged. We also observe that the real incentives have no effect except for the reduction in decision errors. This effect is stronger for money than for time. Copyright Springer Science+Business Media New York 2016

Suggested Citation

  • Emmanuel Kemel & Muriel Travers, 2016. "Comparing attitudes toward time and toward money in experience-based decisions," Theory and Decision, Springer, vol. 80(1), pages 71-100, January.
    • Handle: RePEc:kap:theord:v:80:y:2016:i:1:p:71-100
    DOI: 10.1007/s11238-015-9490-3
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    Cited by:

    1. Robin Cubitt & Orestis Kopsacheilis & Chris Starmer, 2022. "An inquiry into the nature and causes of the Description - Experience gap," Journal of Risk and Uncertainty, Springer, vol. 65(2), pages 105-137, October.
    2. Briony D. Pulford & Andrew M. Colman & Graham Loomes, 2018. "Incentive Magnitude Effects in Experimental Games: Bigger is not Necessarily Better," Games, MDPI, vol. 9(1), pages 1-10, January.
    3. Ilke Aydogan, 2021. "Prior Beliefs and Ambiguity Attitudes in Decision from Experience," Management Science, INFORMS, vol. 67(11), pages 6934-6945, November.

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