Working Over Time: Dynamic Inconsistency in Real Effort Tasks
Experimental tests of dynamically inconsistent time preferences have largely relied on choices over time-dated monetary rewards. Several recent studies have failed to find the standard patterns of time inconsistency. However, such monetary studies contain often discussed confounds. In this paper, we sidestep these confounds and investigate choices over consumption (real effort) in a longitudinal experiment. We pair those effort choices with a companion monetary discounting study. We confirm very limited time inconsistency in monetary choices. However, subjects show considerably more present bias in effort. Furthermore, present bias in the allocation of work has predictive power for demand of a meaningfully binding commitment device. Therefore our findings validate a key implication of models of dynamic inconsistency, with corresponding policy implications.
|Date of creation:||Jan 2013|
|Publication status:||published as Working Over Time: Dynamic Inconsistency in Real Effort Tasks* Ned Augenblick†, Muriel Niederle‡ and Charles Sprenger§ The Quarterly Journal of Economics (2015) doi: 10.1093/qje/qjv020|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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