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Intertemporal choice experiments and large-stakes behavior

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  • Aycinena, Diego
  • Blazsek, Szabolcs
  • Rentschler, Lucas
  • Sprenger, Charles

Abstract

Intertemporal choice experiments are increasingly implemented to make inference about discounting and marginal utility, yet little is known about the predictive power of resulting measures. This project links standard experimental choices to a consumption smoothing decision with large stakes — around 10% of annual income. In a sample of around 400 Guatemalan Conditional Cash Transfer recipients, we find that preferences over large-stakes payment plans are significantly correlated with experimental measures of patience and diminishing marginal utility. These represent the first findings in the literature on the predictive content of such experimentally elicited measures for a large-stakes decision.

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  • Aycinena, Diego & Blazsek, Szabolcs & Rentschler, Lucas & Sprenger, Charles, 2022. "Intertemporal choice experiments and large-stakes behavior," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 484-500.
  • Handle: RePEc:eee:jeborg:v:196:y:2022:i:c:p:484-500
    DOI: 10.1016/j.jebo.2022.02.011
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    2. James Andreoni & Christina Gravert & Michael A. Kuhn & Silvia Saccardo & Yang Yang, 2018. "Arbitrage Or Narrow Bracketing? On Using Money to Measure Intertemporal Preferences," NBER Working Papers 25232, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D3 - Microeconomics - - Distribution
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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