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Anchoring effects in experimental discount rate elicitation

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  • Daniel Hermann
  • Oliver Musshoff

Abstract

Discount rates are often elicited using incentivized or hypothetical multiple price lists. We conduct two multiple price lists according to Coller and Williams ( Experimental Economics 2: 107--127, 1999) with varying ranges of larger--later payments. Participants carry out both tasks and are randomly assigned to a task order as well as to a payment or no-payment treatment. Our results indicate that the range of the first completed task anchors discount rate decisions. Participants who begin the task with the lower range of the larger--later payments stated lower discount rates than participants who start with the task containing a wider range. Paying monetary incentives does not influence the detected anchor effect.

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  • Daniel Hermann & Oliver Musshoff, 2016. "Anchoring effects in experimental discount rate elicitation," Applied Economics Letters, Taylor & Francis Journals, vol. 23(14), pages 1022-1025, September.
    • Handle: RePEc:taf:apeclt:v:23:y:2016:i:14:p:1022-1025
    DOI: 10.1080/13504851.2015.1128072
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    Cited by:

    1. Hermann, Daniel & Musshoff, Oliver, 2016. "Measuring time preferences: Comparing methods and evaluating the magnitude effect," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 65(C), pages 16-26.

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