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Happiness and Time Preference: The Effect of Positive Affect in a Random-Assignment Experiment

  • John Ifcher
  • Homa Zarghamee
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    We conduct a random-assignment experiment to investigate whether positive affect impacts time preference, where time preference denotes a preference for present over future utility. Our result indicates that, compared to neutral affect, mild positive affect significantly reduces time preference over money. This result is robust to various specification checks, and alternative interpretations of the result are considered. Our result has implications for the effect of happiness on time preference and the role of emotions in economic decision making, in general. Finally, we reconfirm the ubiquity of time preference and start to explore its determinants. (JEL D12, D83, I31)

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    Article provided by American Economic Association in its journal American Economic Review.

    Volume (Year): 101 (2011)
    Issue (Month): 7 (December)
    Pages: 3109-29

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    Handle: RePEc:aea:aecrev:v:101:y:2011:i:7:p:3109-29
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    1. Ariel Rubinstein, 2003. ""Economics and Psychology"? The Case of Hyperbolic Discounting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1207-1216, November.
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    11. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-74, June.
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    15. John Ameriks & Andrew Caplin & John Leahy & Tom Tyler, 2007. "Measuring Self-Control Problems," American Economic Review, American Economic Association, vol. 97(3), pages 966-972, June.
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