Reconsidering the Experimental Evidence for Quasi-Hyperbolic Discounting
AbstractExperimental choices between delayed rewards are claimed to provide support for a model of preferences referred to variously as "quasi-hyperbolic," "hyperbolic," and "‚-‰." This paper shows that the experimental results do not differentiate quasi-hyperbolic discounting from exponential discounting. When experimental rewards are financial, quasi-hyperbolic agents can, like exponential agents, become better off by choosing to maximize wealth. Because of liquidity constraints, they may choose a reward with lower net present value, but so may exponential agents for the same reason. When rewards are not financial, then the choices of even exponential agents generally cannot be restricted because of complementarities and informational issues. Since generalizing preferences from exponential to quasi-hyperbolic is neither necessary nor sufficient to generate the experimental results, there is a fundamental identification problem.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Duke University, Department of Economics in its series Working Papers with number 03-03.
Date of creation: 2003
Date of revision:
Contact details of provider:
Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
Phone: (919) 660-1800
Fax: (919) 684-8974
Web page: http://econ.duke.edu/
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-02-18 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Reuben, Ernesto & Sapienza, Paola & Zingales, Luigi, 2010.
"Time discounting for primary and monetary rewards,"
Elsevier, vol. 106(2), pages 125-127, February.
- Schwarz, Mordechai E. & Sheshinski, Eytan, 2007. "Quasi-hyperbolic discounting and social security systems," European Economic Review, Elsevier, vol. 51(5), pages 1247-1262, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Department of Economics Webmaster).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.