An Experimental Analysis of Intertemporal Allocation Behavior
If the future is uncertain, optimal intertemporal decisions rely on anticipating one's own optimal future behavior as is typical in dynamic programming. Our aim is to detect experimentally stylized facts about intertemporal decision making in a rich stochastic environment. Compared to previous experimental studies our experimental design is more complex since the time horizon is uncertain and termination probabilities have to be updated. In particular the decision task is non-stationary as in real life which seriously complicates the task of diagnosing behavioral regularities. In this study we give some illustrative results and provide some general perspectives. Our main result is that subjects'reaction to information about termination probablilities are qualitatively correct. Copyright Kluwer Academic Publishers 2000
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Loewenstein, George & Thaler, Richard H, 1989. "Intertemporal Choice," Journal of Economic Perspectives, American Economic Association, vol. 3(4), pages 181-93, Fall.
- Reinhard Selten & Abdolkarim Sadrieh & Klaus Abbink, 1999.
"Money Does Not Induce Risk Neutral Behavior, but Binary Lotteries Do even Worse,"
Theory and Decision,
Springer, vol. 46(3), pages 213-252, June.
- Selten, Reinhard & Abdolkarim Sadrieh & Klaus Abbink, 1995. "Money does Not Induce Risk Neutral Behavior, but Binary Lotteries Do even Worse," Discussion Paper Serie B 343, University of Bonn, Germany.
- Gary Gigliotti & Barry Sopher, 1997.
"Violations of Present-Value Maximization in Income Choice,"
Theory and Decision,
Springer, vol. 43(1), pages 45-69, July.
- Gary Gigliotti & Barry Sopher, 1996. "Violations of Present-value Maximization in Income Choice," Departmental Working Papers 199624, Rutgers University, Department of Economics.
- Stephen Johnson & Laurence J. Kotlikoff & William Samuelson, 1987. "Can People Compute? An Experimental Test of the Life Cycle Consumption Model," NBER Working Papers 2183, National Bureau of Economic Research, Inc.
- Harrison, Glenn W, 1994. "Expected Utility Theory and the Experimentalists," Empirical Economics, Springer, vol. 19(2), pages 223-53.
- Anderhub,Vital & Mï¿½ller,Rudolf & Schmidt,Carsten, 2001.
"Design and Evaluation of an Economic Experiment via the Internet,"
016, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- Anderhub, Vital & Muller, Rudolf & Schmidt, Carsten, 2001. "Design and evaluation of an economic experiment via the Internet," Journal of Economic Behavior & Organization, Elsevier, vol. 46(2), pages 227-247, October.
- V. Anderhub & R. Müller & C. Schmidt, 1998. "Design and Evaluation of an Economic Experiment via the Internet," SFB 373 Discussion Papers 1998,69, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
- George Loewenstein & Richard H Thaler, 2003. "Anomalies: Intertemporal Choice," Levine's Working Paper Archive 618897000000000784, David K. Levine.
- Hall, Robert E, 1978. "Stochastic Implications of the Life Cycle-Permanent Income Hypothesis: Theory and Evidence," Journal of Political Economy, University of Chicago Press, vol. 86(6), pages 971-87, December.
- Anderhub, Vital & Güth, Werner & Knust, Florian, 2000. "On saving and investing: An experimental study of intertemporal decision making in a complex stochastic environment," SFB 373 Discussion Papers 2000,2, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Selten, Reinhard & Joachim Buchta, 1994. "Experimental Sealed Bid First Price Auctions with Directly Observed Bid Functions," Discussion Paper Serie B 270, University of Bonn, Germany.
When requesting a correction, please mention this item's handle: RePEc:kap:expeco:v:3:y:2000:i:2:p:137-152. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.