Measuring intertemporal preferences using response times
AbstractWe use two different approaches to measure intertemporal preferences. First we employ the classical method of inferring preferences from a series of choices (subjects choose between $X now or $Y in D days). Second we adopt the novel approach of inferring preferences using only response time data from the same choices (how long it takes subjects to choose between $X now or $Y in D days). In principle, the inference from response times should work, since choices between items of nearly equivalent value should take longer than choices between items with substantially different values. We find that choice-based analysis and response-time-based analysis yield nearly identical discount rate estimates. We conclude that response time data sheds light on both our revealed (choice-based) preferences and on the cognitive processes that implement those preferences.
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Date of creation: Sep 2008
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Find related papers by JEL classification:
- C0 - Mathematical and Quantitative Methods - - General
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
- D9 - Microeconomics - - Intertemporal Choice and Growth
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