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Time discounting for primary and monetary rewards

Author

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  • Reuben, Ernesto
  • Sapienza, Paola
  • Zingales, Luigi

Abstract

This paper shows that there is a positive and statistically significant correlation between the short-term discount rate over a monetary reward and the short-term discount rate over a primary reward (chocolate). This correlation, however, is absent among subjects who do not like chocolate and are not hungry. This suggests that monetary rewards are suitable for the study of intertemporal choice. In fact, given the problems associated with the use of primary rewards (differing tastes for the good, hunger, and possible satiation), we argue that measurement with monetary rewards is more reliable.

Suggested Citation

  • Reuben, Ernesto & Sapienza, Paola & Zingales, Luigi, 2008. "Time discounting for primary and monetary rewards," MPRA Paper 10650, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:10650
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    References listed on IDEAS

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    More about this item

    Keywords

    time preferences; hyperbolic discounting; intertemporal choice;
    All these keywords.

    JEL classification:

    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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