IDEAS home Printed from https://ideas.repec.org/a/inm/ordeca/v8y2011i3p233-246.html
   My bibliography  Save this article

Consistency Among Elicitation Techniques for Intertemporal Choice: A Within-Subjects Investigation of the Anomalies

Author

Listed:
  • Jeffery L. Guyse

    (Technology and Operations Management, College of Business Administration, California State Polytechnic University, Pomona, California 91768)

  • Jay Simon

    (Defense Resources Management Institute, Naval Postgraduate School, Monterey, California 93943)

Abstract

The equivalence of two elicitation methods (sequences and matching) has been assumed when empirically testing the traditional discounting model even though the respective literature has revealed results that are dependent on the procedure used. Three common anomalies revealed (gain/loss asymmetry, short/long asymmetry, and the absolute magnitude effect) are investigated using the two different methods in a within-subjects experiment. In both procedures, it appears that the participants in this study evaluate monetary outcomes over time differently than the discounting model predicts. Patterns consistent with two of the anomalies (gain/loss and absolute magnitude effect) surface and interact in both elicitation techniques. Finally, a systematic inconsistency exists between the two methods. We observe significantly more consistency between the two elicitation techniques when the outcome is a gain in the relatively far future than when it is a future loss. This may be due to the participants' inability to display a preference for spreading losses, which they revealed in the sequences task, in the matching task.

Suggested Citation

  • Jeffery L. Guyse & Jay Simon, 2011. "Consistency Among Elicitation Techniques for Intertemporal Choice: A Within-Subjects Investigation of the Anomalies," Decision Analysis, INFORMS, vol. 8(3), pages 233-246, September.
    • Handle: RePEc:inm:ordeca:v:8:y:2011:i:3:p:233-246
    DOI: 10.1287/deca.1110.0212
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/deca.1110.0212
    Download Restriction: no
    File URL: https://libkey.io/10.1287/deca.1110.0212?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Matthew Rabin & Ted O'Donoghue, 1999. "Doing It Now or Later," American Economic Review, American Economic Association, vol. 89(1), pages 103-124, March.
    2. Loewenstein, George F & Sicherman, Nachum, 1991. "Do Workers Prefer Increasing Wage Profiles?," Journal of Labor Economics, University of Chicago Press, vol. 9(1), pages 67-84, January.
    3. Weber, Bethany J. & Chapman, Gretchen B., 2005. "The combined effects of risk and time on choice: Does uncertainty eliminate the immediacy effect? Does delay eliminate the certainty effect?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 96(2), pages 104-118, March.
    4. Shane Frederick & George Loewenstein, 2008. "Conflicting motives in evaluations of sequences," Journal of Risk and Uncertainty, Springer, vol. 37(2), pages 221-235, December.
    5. Samuel Greenhouse & Seymour Geisser, 1959. "On methods in the analysis of profile data," Psychometrika, Springer;The Psychometric Society, vol. 24(2), pages 95-112, June.
    6. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
    7. Keller, L Robin & Strazzera, Elisabetta, 2002. "Examining Predictive Accuracy Among Discounting Models," Journal of Risk and Uncertainty, Springer, vol. 24(2), pages 143-160, March.
    8. Stevenson, Mary Kay, 1992. "The impact of temporal context and risk on the judged value of future outcomes," Organizational Behavior and Human Decision Processes, Elsevier, vol. 52(3), pages 455-491, August.
    9. Loewenstein, George & Thaler, Richard H, 1989. "Intertemporal Choice," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 181-193, Fall.
    10. Kirby, Kris N. & Marakovic, Nino N., 1995. "Modeling Myopic Decisions: Evidence for Hyperbolic Delay-Discounting within Subjects and Amounts," Organizational Behavior and Human Decision Processes, Elsevier, vol. 64(1), pages 22-30, October.
    11. Gretchen B. Chapman & Arthur S. Elstein, 1995. "Valuing the Future," Medical Decision Making, , vol. 15(4), pages 373-386, October.
    12. Martin Ahlbrecht & Martin Weber, 1997. "An Empirical Study on Intertemporal Decision Making Under Risk," Management Science, INFORMS, vol. 43(6), pages 813-826, June.
    13. Chapman, Gretchen B., 1996. "Expectations and Preferences for Sequences of Health and Money," Organizational Behavior and Human Decision Processes, Elsevier, vol. 67(1), pages 59-75, July.
    14. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
    15. Uri Benzion & Amnon Rapoport & Joseph Yagil, 1989. "Discount Rates Inferred from Decisions: An Experimental Study," Management Science, INFORMS, vol. 35(3), pages 270-284, March.
    16. Guyse, Jeffery L. & Keller, L. Robin & Eppel, Thomas, 2002. "Valuing Environmental Outcomes: Preferences for Constant or Improving Sequences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 87(2), pages 253-277, March.
    17. George Loewenstein & Drazen Prelec, 1992. "Anomalies in Intertemporal Choice: Evidence and an Interpretation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(2), pages 573-597.
    18. Schmitt, David R. & Kemper, Theodore D., 1996. "Preference for Different Sequences of Increasing or Decreasing Rewards," Organizational Behavior and Human Decision Processes, Elsevier, vol. 66(1), pages 89-101, April.
    19. Lowenstein, George & Prelec, Drazen, 1991. "Negative Time Preference," American Economic Review, American Economic Association, vol. 81(2), pages 347-352, May.
    20. Marjorie K. Shelley, 1993. "Outcome Signs, Question Frames and Discount Rates," Management Science, INFORMS, vol. 39(7), pages 806-815, July.
    21. Frederick, Shane, 2003. "Measuring Intergenerational Time Preference: Are Future Lives Valued Less?," Journal of Risk and Uncertainty, Springer, vol. 26(1), pages 39-53, January.
    22. Read, Daniel & Roelofsma, Peter H. M. P., 2003. "Subadditive versus hyperbolic discounting: A comparison of choice and matching," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 140-153, July.
    23. Paul A. Samuelson, 1937. "A Note on Measurement of Utility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 4(2), pages 155-161.
    24. Gary Gigliotti & Barry Sopher, 1997. "Violations of Present-Value Maximization in Income Choice," Theory and Decision, Springer, vol. 43(1), pages 45-69, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:cup:judgdm:v:8:y:2013:i:3:p:236-249 is not listed on IDEAS
    2. Jeffery L. Guyse & L. Robin Keller & Candice H. Huynh, 2020. "Valuing Sequences of Lives Lost or Saved Over Time: Preference for Uniform Sequences," Decision Analysis, INFORMS, vol. 17(1), pages 24-38, March.
    3. L. Robin Keller, 2011. "From the Editor ---Multiattribute and Intertemporal Preferences, Probability, and Stochastic Processes: Models and Assessment," Decision Analysis, INFORMS, vol. 8(3), pages 165-169, September.
    4. L. Robin Keller & Ali Abbas & J. Eric Bickel & Vicki M. Bier & David V. Budescu & John C. Butler & Philippe Delquié & Kenneth C. Lichtendahl & Jason R. W. Merrick & Ahti Salo & George Wu, 2011. "From the Editors ---Probability Scoring Rules, Ambiguity, Multiattribute Terrorist Utility, and Sensitivity Analysis," Decision Analysis, INFORMS, vol. 8(4), pages 251-255, December.
    5. David J. Hardisty & Katherine F. Thompson & David H. Krantz & Elke U. Weber, 2013. "How to measure time preferences: An experimental comparison of three methods," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(3), pages 236-249, May.
    6. Alexander Adamou & Yonatan Berman & Diomides Mavroyiannis & Ole Peters, 2021. "Microfoundations of Discounting," Decision Analysis, INFORMS, vol. 18(4), pages 257-272, December.
    7. Cruz Rambaud, Salvador & Ortiz Fernández, Piedad & Parra Oller, Isabel María, 2023. "A systematic review of the main anomalies in intertemporal choice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 104(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeffery L. Guyse & L. Robin Keller & Candice H. Huynh, 2020. "Valuing Sequences of Lives Lost or Saved Over Time: Preference for Uniform Sequences," Decision Analysis, INFORMS, vol. 17(1), pages 24-38, March.
    2. Scholten, Marc & Read, Daniel, 2006. "Beyond discounting: the tradeoff model of intertemporal choice," LSE Research Online Documents on Economics 22710, London School of Economics and Political Science, LSE Library.
    3. Paola Manzini & Marco Mariotti, 2007. "Choice over Time," Working Papers 605, Queen Mary University of London, School of Economics and Finance.
    4. Musau, Andrew, 2009. "Modeling Alternatives to Exponential Discounting," MPRA Paper 16416, University Library of Munich, Germany.
    5. Galizzi, Matteo M. & Miraldo, Marisa & Stavropoulou, Charitini & van der Pol, Marjon, 2016. "Doctor–patient differences in risk and time preferences: A field experiment," Journal of Health Economics, Elsevier, vol. 50(C), pages 171-182.
    6. Read, Daniel & Roelofsma, Peter H. M. P., 2003. "Subadditive versus hyperbolic discounting: A comparison of choice and matching," Organizational Behavior and Human Decision Processes, Elsevier, vol. 91(2), pages 140-153, July.
    7. Cruz Rambaud, Salvador & Parra Oller, Isabel María & Valls Martínez, María del Carmen, 2018. "The amount-based deformation of the q-exponential discount function: A joint analysis of delay and magnitude effects," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 508(C), pages 788-796.
    8. Guyse, Jeffery L. & Keller, L. Robin & Eppel, Thomas, 2002. "Valuing Environmental Outcomes: Preferences for Constant or Improving Sequences," Organizational Behavior and Human Decision Processes, Elsevier, vol. 87(2), pages 253-277, March.
    9. Jos'e Cl'audio do Nascimento, 2019. "Decision-making and Fuzzy Temporal Logic," Papers 1901.01970, arXiv.org, revised Feb 2019.
    10. Epper, Thomas, 2015. "Income Expectations, Limited Liquidity, and Anomalies in Intertemporal Choice," Economics Working Paper Series 1519, University of St. Gallen, School of Economics and Political Science.
    11. Marc Scholten & Daniel Read, 2006. "Discounting by Intervals: A Generalized Model of Intertemporal Choice," Management Science, INFORMS, vol. 52(9), pages 1424-1436, September.
    12. Daniel Read & Christopher Y. Olivola & David J. Hardisty, 2017. "The Value of Nothing: Asymmetric Attention to Opportunity Costs Drives Intertemporal Decision Making," Management Science, INFORMS, vol. 63(12), pages 4277-4297, December.
    13. Anke Gerbe & Kirsten I.M. Rohde, 2010. "Risk and Preference Reversals in Intertemporal Choice," Post-Print hal-00911832, HAL.
    14. Gerber, Anke & Rohde, Kirsten I.M., 2010. "Risk and preference reversals in intertemporal choice," Journal of Economic Behavior & Organization, Elsevier, vol. 76(3), pages 654-668, December.
    15. Serdar Sayman & Ayse Öncüler, 2009. "An Investigation of Time Inconsistency," Management Science, INFORMS, vol. 55(3), pages 470-482, March.
    16. Duffy, Sean & Smith, John & Woods, Kristin, 2015. "How does the preference for increasing payments depend on the size and source of the payments?," MPRA Paper 64212, University Library of Munich, Germany.
    17. Thomas Epper & Helga Fehr-Duda, 2012. "The missing link: unifying risk taking and time discounting," ECON - Working Papers 096, Department of Economics - University of Zurich, revised Oct 2018.
    18. Marjon van der Pol & John Cairns, 2011. "Descriptive validity of alternative intertemporal models for health outcomes: an axiomatic test," Health Economics, John Wiley & Sons, Ltd., vol. 20(7), pages 770-782, July.
    19. Giles W Story & Ivaylo Vlaev & Ben Seymour & Joel S Winston & Ara Darzi & Raymond J Dolan, 2013. "Dread and the Disvalue of Future Pain," PLOS Computational Biology, Public Library of Science, vol. 9(11), pages 1-18, November.
    20. Paola Manzini & Marco Mariotti & Luigi Mittone, 2010. "Choosing monetary sequences: theory and experimental evidence," Theory and Decision, Springer, vol. 69(3), pages 327-354, September.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ordeca:v:8:y:2011:i:3:p:233-246. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.