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A guaranteed immediate payout reduces impatience of financially constrained individuals

Author

Listed:
  • Kimberley van der Heijden

    (a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;)

  • Anouk Festjens

    (a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;)

  • Caroline Goukens

    (a Maastricht University School of Business and Economics, Maastricht University, 6211 LM Maastricht, The Netherlands;)

  • Tom Meyvis

    (b Leonard N. Stern School of Business, New York University, New York, NY 10012)

Abstract

A wealth of existing findings show that financially constrained individuals are myopic decision-makers who are particularly concerned about the present. We propose that the use of existing intertemporal choice tasks may have skewed our understanding of the decision-making of financially constrained individuals. Specifically, we observe that—as long as an immediate payout is guaranteed—financially constrained individuals are no more myopic than their more affluent counterparts.

Suggested Citation

  • Kimberley van der Heijden & Anouk Festjens & Caroline Goukens & Tom Meyvis, 2022. "A guaranteed immediate payout reduces impatience of financially constrained individuals," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 119(3), pages 2108832119-, January.
    • Handle: RePEc:nas:journl:v:119:y:2022:p:e2108832119
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