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Time discounting for primary and monetary rewards

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

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.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10650.

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Date of creation: Jul 2008
Date of revision:
Handle: RePEc:pra:mprapa:10650
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  1. Drew Fudenberg & David K Levine, 2005. "A Dual Self Model of Impulse Control," Levine's Working Paper Archive 618897000000000876, David K. Levine.
  2. Christopher Harris & David Laibson, 1999. "Dynamic Choices of Hyperbolic Consumers," Harvard Institute of Economic Research Working Papers 1886, Harvard - Institute of Economic Research.
  3. 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.
  4. Besharov, Gregory & Coffey, Bentley, 2003. "Reconsidering the Experimental Evidence for Quasi-Hyperbolic Discounting," Working Papers 03-03, Duke University, Department of Economics.
  5. James Choi & David Laibson & Brigitte Madrian & Andrew Metrick, 2005. "Optimal Defaults and Active Decisions," Levine's Bibliography 666156000000000488, UCLA Department of Economics.
  6. Karp, Larry, 2004. "Global Warming and Hyperbolic Discounting," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt5zh730nc, Department of Agricultural & Resource Economics, UC Berkeley.
  7. James J. Choi & David Laibson & Brigitte C. Madrian & Andrew Metrick, 2004. "Saving or Retirement on the Path of Least Resistance," Levine's Bibliography 122247000000000606, UCLA Department of Economics.
  8. Reuben, Ernesto & Sapienza, Paola & Zingales, Luigi, 2008. "Procrastination and Impatience," CEPR Discussion Papers 6668, C.E.P.R. Discussion Papers.
  9. repec:tpr:qjecon:v:112:y:1997:i:2:p:443-77 is not listed on IDEAS
  10. B. Douglas Bernheim & Antonio Rangel, 2004. "Addiction and Cue-Triggered Decision Processes," American Economic Review, American Economic Association, vol. 94(5), pages 1558-1590, December.
  11. Laibson, David I., 1997. "Golden Eggs and Hyperbolic Discounting," Scholarly Articles 4481499, Harvard University Department of Economics.
  12. repec:oup:qjecon:v:112:y:1997:i:2:p:443-77 is not listed on IDEAS
  13. Maribeth Coller & Melonie Williams, 1999. "Eliciting Individual Discount Rates," Experimental Economics, Springer, vol. 2(2), pages 107-127, December.
  14. Thaler, Richard, 1981. "Some empirical evidence on dynamic inconsistency," Economics Letters, Elsevier, vol. 8(3), pages 201-207.
  15. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  16. 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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