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Is Generosity Time-Inconsistent? Present Bias across Individual and Social Context

Author

Listed:
  • Felix Kölle

    (Department of Economics, University of Cologne, Albertus Magnus Platz, 50923 Cologne)

  • Lukas Wenner

    (Department of Economics, University of Cologne, Albertus Magnus Platz, 50923 Cologne)

Abstract

We investigate dynamically inconsistent time preferences across contexts with and without interpersonal trade-offs. In a longitudinal experiment participants make a series of intertemporal allocation decisions of real-effort tasks between themselves and another person. Our results reveal that agents are present-biased when making choices that only affect themselves but not when choosing for others. Despite this asymmetry, we find no evidence for time-inconsistent generosity, i.e., when choices involve trade-offs between own and other’s consumption. Structural estimations reveal no individual-level correlation of present bias across contexts. Discounting in social situations thus seems to be conceptually different from discounting in individual situations.

Suggested Citation

  • Felix Kölle & Lukas Wenner, 2021. "Is Generosity Time-Inconsistent? Present Bias across Individual and Social Context," ECONtribute Discussion Papers Series 077, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:077
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    File URL: https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_077_2021.pdf
    File Function: First version, 2021
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    References listed on IDEAS

    as
    1. James Andreoni & Charles Sprenger, 2012. "Estimating Time Preferences from Convex Budgets," American Economic Review, American Economic Association, vol. 102(7), pages 3333-3356, December.
    2. Ned Augenblick & Muriel Niederle & Charles Sprenger, 2015. "Editor's Choice Working over Time: Dynamic Inconsistency in Real Effort Tasks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1067-1115.
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    Cited by:

    1. Bortolotti, Stefania & Kölle, Felix & Wenner, Lukas, 2022. "On the persistence of dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1053-1065.
    2. Breuer, Wolfgang & Müller, Torbjörn & Sachsenhausen, Eric, 2022. "The determinants of discounting in intergenerational decision-making," European Economic Review, Elsevier, vol. 148(C).

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    More about this item

    Keywords

    Present bias; altruism; stability; real effort; dictator game; intertemporal choice;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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