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Do People (Want To) Plan?

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  • John D. Hey

Abstract

This paper makes a modest contribution to investigating whether people, when tackling dynamic decision problems, formulate plans and then implement them. Assumed behaviour of this form is central to many theories of economic decision‐making, yet much direct empirical evidence (from economists and particularly from psychologists) suggests that it has rather dubious empirical support. The paper begins by discussing the importance and centrality of planning to economic theories of dynamic decision‐making, and then examines the difficulty of empirically investigating whether planning occurs. It then describes a simple experiment that sheds some light on this phenomenon. The findings from the experiment, although only directly relevant to the context of the experiment, do suggest that people do (want to) plan when the circumstances are appropriate. The paper concludes by discussing alternative designs.

Suggested Citation

  • John D. Hey, 2005. "Do People (Want To) Plan?," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(1), pages 122-138, February.
    • Handle: RePEc:bla:scotjp:v:52:y:2005:i:1:p:122-138
    DOI: 10.1111/j.0036-9292.2005.00338.x
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    1. David M. Kreps & Evan L. Porteus, 2013. "Temporal von Neumann—Morgenstern and Induced Preferences," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 11, pages 181-206, World Scientific Publishing Co. Pte. Ltd..
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    Cited by:

    1. Anna Conte & M. Levati, 2014. "Use of data on planned contributions and stated beliefs in the measurement of social preferences," Theory and Decision, Springer, vol. 76(2), pages 201-223, February.
    2. Rodepeter, Ralf & Winter, Joachim, 1999. "Rules of thumb in life-cycle savings models," Sonderforschungsbereich 504 Publications 99-81, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    3. Maria J. Ruiz Martos, 2017. "Individual Dynamic Choice Behaviour and the Common Consequence Effect," ThE Papers 17/01, Department of Economic Theory and Economic History of the University of Granada..
    4. Pradiptyo, Rimawan & Sahadewo, Gumilang Aryo, 2012. "On The Complexity of Eliminating Fuel Subsidy in Indonesia; A Behavioral Approach," MPRA Paper 40045, University Library of Munich, Germany.
    5. Diasakos, Theodoros M, 2013. "Complexity and Bounded Rationality in Individual Decision Problemsing," SIRE Discussion Papers 2013-93, Scottish Institute for Research in Economics (SIRE).
    6. Maria J. Ruiz Martos, 2018. "Sequential Common Consequence Effect and Incentives," ThE Papers 18/04, Department of Economic Theory and Economic History of the University of Granada..
    7. Theodoros M. Diasakos, 2008. "Complexity and Bounded Rationality in Individual Decision Problems," Carlo Alberto Notebooks 90, Collegio Carlo Alberto.

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