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Can intertemporal choice experiments elicit time preferences for consumption?

Author

Listed:
  • Robin Cubitt

    (School of Economics, University of Nottingham)

  • Daniel Read

    (Durham Business School, University of Durham)

Abstract

The paper considers the problems of interpreting subjects’ responses to laboratory intertemporal choice and matching tasks that arise from (i) the existence of capital markets outside the laboratory; (ii) the distinction between observable income and unobservable consumption. It distinguishes between three approaches to these problems that are identifiable in the literature: the straightforward view; the separation view; and the censored data view. It shows that none of these is fully satisfactory and discusses the resulting implications for intertemporal decision-making experiments.

Suggested Citation

  • Robin Cubitt & Daniel Read, 2005. "Can intertemporal choice experiments elicit time preferences for consumption?," Discussion Papers 2005-16, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  • Handle: RePEc:not:notcdx:2005-16
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    References listed on IDEAS

    as
    1. Robert Sugden, 2004. "The Opportunity Criterion: Consumer Sovereignty Without the Assumption of Coherent Preferences," American Economic Review, American Economic Association, vol. 94(4), pages 1014-1033, September.
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    5. Shane Frederick & George Loewenstein & Ted O'Donoghue, 2002. "Time Discounting and Time Preference: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 351-401, June.
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    7. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Discount rates; elicitation of time preferences; intertemporal decision-making experiments;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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