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An Experiment on Time Preference and Misprediction in Unpleasant Tasks

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  • Ned Augenblick
  • Matthew Rabin

Abstract

We experimentally investigate the time-inconsistent taste for immediate gratification and future-preference misprediction. Across 7 weeks, 100 participants choose the number of unpleasant transcription tasks given various wages to complete immediately and at different future dates. Participants preferred 10–12% fewer tasks in the present compared to any future date, leading to an estimated $\beta $ of $0.83$. Comparing predictions with actual immediate-work choices provides evidence against substantial sophistication, with estimates implying that participants understand no more than 24% of their present bias. Finally, we find evidence of “projection bias”: participants wished to complete 4–12% fewer tasks when decisions were elicited right after completing tasks rather than before.

Suggested Citation

  • Ned Augenblick & Matthew Rabin, 2019. "An Experiment on Time Preference and Misprediction in Unpleasant Tasks," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(3), pages 941-975.
    • Handle: RePEc:oup:restud:v:86:y:2019:i:3:p:941-975.
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    File URL: http://hdl.handle.net/10.1093/restud/rdy019
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    More about this item

    Keywords

    Time discounting; Sophistication; Maivete; Misprediction; Real effort; Projection bias;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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