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Revealed time-preference

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  • Dziewulski, Pawel

Abstract

Consider an experiment in which subjects are asked to choose between pairs consisting of a monetary payment and a time-delay at which the payment is delivered. Given a finite set of observations, under what conditions the choices of an individual agent can be rationalised by a discounted utility function? We develop an axiomatic characterisation of time-preference with various forms of discounting, including weakly present-biased, quasi-hyperbolic, and exponential, and determine the testable restrictions for each specification. Moreover, we discuss identification issues which may arise in this class of experiments.

Suggested Citation

  • Dziewulski, Pawel, 2014. "Revealed time-preference," MPRA Paper 56596, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:56596
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    References listed on IDEAS

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    Cited by:

    1. Pawel Dziewulski & John Quah, 2014. "Testing for production with complementarities," Economics Series Working Papers 722, University of Oxford, Department of Economics.

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    More about this item

    Keywords

    revealed preference; testable restrictions; rationalisation; time{-}preference; discounted utility;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C60 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - General
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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