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Is Generosity Time-Inconsistent? Present Bias across Individual and Social Contexts

Author

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  • Felix Kölle

    (University of Cologne)

  • Lukas Wenner

    (University of Cologne)

Abstract

We investigate dynamically inconsistent time preferences across contexts with and without interpersonal trade-offs. In a longitudinal experiment, participants make a series of intertemporal allocation decisions of real-effort tasks between themselves and another person. Our results reveal that agents are present-biased when making choices that affect only themselves but not when choosing on behalf of others. Despite this asymmetry, we find no evidence for time-inconsistent generosity, that is, when choices involve trade-offs between one's own and others' consumption. Structural estimations reveal no individual-level correlation of present bias across contexts. Discounting in social situations thus seems to be conceptually different from discounting in individual situations.

Suggested Citation

  • Felix Kölle & Lukas Wenner, 2023. "Is Generosity Time-Inconsistent? Present Bias across Individual and Social Contexts," The Review of Economics and Statistics, MIT Press, vol. 105(3), pages 683-699, May.
    • Handle: RePEc:tpr:restat:v:105:y:2023:i:3:p:683-699
    DOI: 10.1162/rest_a_01049
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    References listed on IDEAS

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    1. Ned Augenblick & Muriel Niederle & Charles Sprenger, 2015. "Editor's Choice Working over Time: Dynamic Inconsistency in Real Effort Tasks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1067-1115.
    2. James Andreoni & Charles Sprenger, 2012. "Estimating Time Preferences from Convex Budgets," American Economic Review, American Economic Association, vol. 102(7), pages 3333-3356, December.
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    Cited by:

    1. Breuer, Wolfgang & Müller, Torbjörn & Sachsenhausen, Eric, 2022. "The determinants of discounting in intergenerational decision-making," European Economic Review, Elsevier, vol. 148(C).
    2. Bortolotti, Stefania & Kölle, Felix & Wenner, Lukas, 2022. "On the persistence of dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 1053-1065.

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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

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